Lack of innovation a stumbling block to insurance penetration

Insurers have been challenged to invest in research, innovation and create healthy consumer relationships if they are to increase insurance penetration.

“In any business relationship both customers and traders will always consider value for money and brand reputation as the most important factors. Others factors include trust and clear communication channels,” said Uchumi Supermarket chief executive Julius Kipng’etich.

Kipnge;tich was speaking during this year’s Association of Kenya Insurers (AKI) Agents of the Year Awards (AAYA) who urged insurance companies to increase awareness to the untapped market.

“Insurers have to understand what customers are looking at for satisfaction in abid to increase the country’s penetration and the general outlook of the economy,” he said.

AKI Chairman Justus Mutiga challenged insurers to  take more responsibility for all customer relationships by understanding precisely what different customers prefer in all phases of their relationship.

“AKI will continue to work closely with all players in the sector to boost the industry growth to ensure better service delivery that results in job creation and secure economic growth,” he said.

The annual AAYA Awards is divided into four groups- New Business Award, Persistency award, Youngest Agent and Company Award to recognize Life Insurance companies under writing Group Life class of business in line with industry best practice, which brings together insurance industry stakeholders to celebrate the achievements of the Life Insurance in the country.

The sector contributed gross written premium worth Sh 157.21 billion in 2014 compared to Sh 130.65 billion in 2013 representing an increase of 20.3 percent.

Life Insurance premiums increased from Sh 44.01 billion in 2013 to Sh 56.97 billion in 2014, an increase of 29.4 per cent, despite a sluggish growth in that class – which is slightly above 1 per cent in terms of penetration, while general insurance is above 3 per cent.

According to reports released by AKI, Insurance Regulatory Authority (IRA) and Ernst and Young (EY) showed that insurance industry was growing and has great potential making it the envy of many players in other African countries.

The reports all predicted a busy year buoyed by relaxed policies – with mergers and acquisitions expected as well.