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Kenya Insurance Report Q4 2011
Business Monitor International, Sep 2011, Pages: 44
Business Monitor International's Kenya Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kenya's insurance industry.
Over the long-term, the industry has shown itself to be extremely resilient in face of challenging economic and political conditions.
Over the short-term, the industry has demonstrated that it is genuinely innovative. Index-based Weather Insurance and Takaful have arrived in Kenya over the course of 2011.
Published results in relation to calendar 2010 have generally been good. The main problem for the life insurance segment appears to be lack of understanding of the benefits of life insurance. New capital is flowing to the segment. The main problem for the non-life segment will probably be downwards pressure on prices and margins as a result of competition in a fragmented market. However, product innovation should mitigate this.
At first glance, the Kenyan insurance sector looks to be a small and fragmented market, where sub-scale and predominantly local companies are trying to sell products to customers who are too poor or too lacking in understanding to buy them. Such a pessimistic interpretation would be wrong. Kenya’s insurance companies have managed to thrive (in most cases) in spite of (very) challenging economic and political conditions over the long term. By the standards of a country with Kenya’s per capita income level, non-life penetration is quite high. In complete contrast to, say, Nigeria, life insurers account for a significant portion of total premiums. Foreign insurers account for a minority of premiums, but have considered it worthwhile to be present.Pan Africa Life has a strategic relationship with South Africa’s Sanlam. South Africa’s Metropolitian Life has set up a subsidiary in Kenya. In the non-life segment, Chartis has been one of the larger players.
Best of all, Kenya’s insurers are genuinely innovative. The last few months have seen the arrival of Takaful, payment of claims for new Index Based Weather Insurance, introduction of new comprehensive auto insurance products and the further development of imaginative health insurance products and microinsurance products.
The Association of Kenya Insurers (AKI) hopes to promote the development of the industry with the result that total premiums rise to KES200bn by 2015. As of August 2011, BMI is looking for total premiums of just under KES160bn in that year. However we recognise that there is a possibility that the AKI’s vision proves to be conservative.
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