NAIROBI, Kenya, Feb 5 – Faulu Bank has launched a Sh20 million system that has fully automated all bancassurance processes, to improve operational efficiencies and deliver convenience.
According to the firm, the system will also automatically issue quick quotations, facilitate cover processing and administer all insurance products underwritten by UAP Old Mutual group and other licensed insurance companies in Kenya.
“Bancassurance is an important part of our service offering because it helps our customers access a wide range of insurance products, helping them protect the wealth that they work so hard to create,” said Faulu Bank Managing Director, Apollo Njoroge said.
Njoroge says the system is expected to expand the microfinance institution’s bancassurance revenue to more than Sh70 million by the end of 2020.
It will also improve decision-making at the bank, due to the timeliness and accuracy of the data it processes as well as reports and the fact that it will be integrated with the Bank’s core banking system.
“With this new system we will collect data with greater scientific precision. This will enable us to improve the customer experience by delivering what our customer wants, how they want it, when they want it and where they want it,” he said.
This comes at a time when the penetration of insurance, which is calculated as the total value of insurance premiums as a percentage of GDP, has stagnated at around 3 percent in Kenya compared to 16 percent in South Africa, which the highest in Africa.
To help Kenya deepen insurance penetration, regulators in the insurance and banking sectors have supported the adoption of bancassurance by banks and microfinance institutions.
Bancassurance allows for the selling of insurance products and services through banks and microfinance institutions, which typically have larger branch networks than insurance companies and enjoy closer relationships with their customers, making it easier to demystify insurance.
In Kenya, low insurance penetration has been associated with misperceptions about insurance and low consumer education.