NAIROBI, Kenya, Apr 9 – The Association of Kenya Insurers (AKI) has praised recent initiatives in the industry that have led to a significant growth in life insurance covers from 25 percent of the GDP to 33 percent over the last five years.
AKI Executive Director Tom Gichuhi said the growth had raised the share of life insurance considerably, in tandem with international trends where life insurance takes the larger share of the industry’s contribution to the GDP.
He said the marked growth had deepened insurance cover and upped total premiums for the insurers and the industry at large.
He regretted that for several years, Kenya’s industry had been stuck in the reverse where general insurance share was higher than the share of life insurance.
In developed economies, he said, life insurance has always dominated the business in the insurance sector.
“You have done well to contribute to the eight percent growth. I hope that we will post better results when we compile statistics for 2009 later this month,” Mr Gichuhi told insurance agents attending the AKI Agents Forum at a Nairobi Hotel.
He also noted that the increased uptake of life insurance products signals that Kenya is steadily edging towards becoming an emerging economy.
He predicted life insurance would constitute 60 percent of the insurance share to the GDP in the next 20 years as envisaged in the Vision 2030.
This would represent a marked improvement from 2008 statistics where general insurance contributed 67 percent to the GDP compared to 33 percent for life insurance.
He said that despite the common talk of alternative channels for distributing insurance, life agents were there to stay since there is no known effective channel that can replace the life insurance sales agents across the world.
Mr Gichuhi said that life insurance products were sophisticated and required a detailed explanation to clients that technological advancements could not perform.