NAIROBI, Kenya, Aug 19 – The local insurance industry and related financial services firms in the country have been challenged to improve their market development efforts through the retention of qualified sales agents countrywide.
National Treasury Cabinet Secretary Henry Rotich says the lack of qualified agents who can inspire public confidence and unpack the benefits of financial services, has contributed to the general apathy and relatively poor insurance penetration rates.
He expressed concerns over the poor uptake of life insurance products noting that the sector continues to be largely driven by non-life business unlike in the other well-developed insurance markets.
This is even as non-life insurance premiums make up two thirds of the total premiums while life premiums contribute only a third against the global average on life insurance business at 54.8 percent and non-life insurance contributing 45.2 percent.
“Last year the insurance industry paid out a total of Sh49 billion in claims and gross premiums amounted to Sh174 billion representing an increase by 10.4 percent from Sh158 billion reported in 2014,” says Rotich.
However, insurance penetration stood at only 2.8 percent of GDP in 2015, way below the worldwide average of 6.5 percent of GDP and the 5.0 percent envisioned in the Vision 2030 National Development plan.
The sector faces several challenges including low-income, irregular earning patterns, costs of insurance premiums and general apathy towards insurance as a service and product among others.
“In particular, as a service industry, the way in which insurance is perceived is critical to its growth. The poor image of the industry has led to lack of confidence and trust by policy holders and the general public,” he said.
Currently, Kenya’s insurance sector has 47 insurance companies and is regulated by the Insurance Regulatory Authority.