National Treasury Cabinet Secretary Henry Rotich has challenged local insurance and related financial services firms, to improve their market development efforts through the retention of qualified sales agents countrywide.
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, said Rotich.
The cabinet secretary further expressed the government concern at the poor uptake of life insurance products noting that the Kenyan insurance market continues to be largely driven by non-life business unlike in the other well-developed insurance markets.
In Kenya, Rotich disclosed, non-life insurance premiums contribute two thirds of the total premiums while life premiums contribute only a third against the global average scenario 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 KSh. 49 billion in claims and gross premiums amounted to KSh. 174 billion representing an increase by 10.4% from KSh. 158 billion reported in 2014.
Despite this good performance, insurance penetration stood at only 2.8% of GDP in 2015, way below the worldwide average of 6.5% of GDP and the 5.0% envisioned in the Vision 2030 National Development plan.
READ; Pan Africa Insurance Holdings is now Sanlam Kenya Plc
Speaking at a reception to mark the rebranding of Pan Africa Insurance Holdings (PAIHL) to Sanlam Kenya Plc, Rotich underscored the need to expeditiously address the poor image associated with Insurance sales and service delivery.
Though dogged by other challenges including low-income, irregular earning patterns, costs of insurance premiums and general apathy towards insurance as a service and product, lack of agents and marketers with specialised and sophisticated skills in insurance products continues to be a cause for alarm.
“The challenge is on all of us, including Sanlam Kenya, to look into ways of working closely with other stakeholders to address these issues to enable more Kenyans not only appreciate but also access insurance services,” he said.
“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.
The Government, he assured will be at hand to support any linkage considerations by the Sanlam Group, to the IRA and the College of Insurance of Kenya to enhance and deepen insurance capacity.
“Given our bilateral relations with the Republic of South Africa, we welcome further support in raising the profile and skills capacity for our insurance service sector,” he said.