Insurance companies bet on the right business as their revenues surged over the past one year. The growth is being attributed to favorable macro-economic and alternative distribution channels. The companies have been used banks and micro insurance avenues to grow their premium payments as they are seen to be more convenience.
The latest report from the Association of Kenya Insurers (AKI) reveals a growth of 20 percent in recorded written premium. In 2013, insurance companies recorded sh130 billion while in 2014, the number increased to sh157 billion.
AKI projects that in 2015, the figure could rise to sh200 billion, a bullish figure that indicate Kenya’s increase appetite to insure their goods and properties. Certainly recent recurrent episodes of fire, like involving small businesses in places like Gikomba means that if the insurance companies provide them good packages, they will have a huge market to embrace.
Kenya’s life insurance premiums registered 29.4 per cent growth with Sh56.97 billion while non-life insurance grew 15.7 per cent to Sh100 billion.
An insurance survey report by Think Business magazine showed the industry’s market penetration last year stood at 2.93 percent, with a projected penetration of 3.5 per cent this year. Reaching 3.5 percent this year demands of the insurance companies to be more visible and offer better, pocket friendly packages to potential clients.
In addition, written premiums will grow with flexible payment methods like using mobile platforms like Mpesa or even embracing agent banking techniques like commercial banks and micro-finance institutions. These new distribution avenues will make the difference for companies and those who embrace them positively could be for better profits margins in the coming years.
“Mobile and technology advancement will enhance the distribution channel in the industry.”
The AKI report further showed that life insurance premium growth in Africa slowed to 1.6 per cent in 2014 from six per cent in 2013.