Insurance companies are betting on more working women to increase update of product and drive growth in long term insurance.
The June 2018 report of AIB Capital adds that change of family structure from extended family setting to nuclear setting, a growing middle class and product development bancassurance and last expense are other factors that will help the sector grow in the long term.
The increase in the number of women in the working bracket currently standing at 48.5 per cent of total labor force would mean that the percentage of total workforce is above 50 per cent.
In addition, financial sector deepening leading to an improved method of distribution of insurance products, collection and payment of premiums like bancassurance, online and mobile payment and increase in international trade including marine trade will further support the growth.
Currently, insurance penetration in Kenya stands at 2.73 per cent which is considered low compared with the world average of 6.28 per cent, going by the annual Insurance Industry Report for the year ended 31st December 2016.
“Moreover, in the short term, insurance will see marine and transit insurance, aviation and engineering remain growth champions with increase in international trade and growing number of infrastructure projects”, reads the AIB report in part.
But to be able to overcome this, the sector has to work on building confidence as its reputation has been eroded. The Insurance Regulatory Authority (IRA) report states that major issues causing negative perception towards insurance include delayed claim settlement, lack of awareness about the needs and benefits of insurance and industry malpractices.
The AIB report notes that the insurance industry has undergone tremendous growth with 2017 Full Year Gross Premiums topping sh207.68 billion, a 6.6 per cent growth from sh174.74 billion and a five year Compounded Annual Growth Rate (CAGR) of 10.0 per cent.
“The growth in the industry is a deliberate move by the players in terms of improved regulations, product development, insurance education in long term business specifically in pension, improved international trade and entry of new players”, the report reads.
It adds that with further industry development, a 12 per cent growth driven by economic growth is feasible. “Change in demography which will aid growth in long term business gross premium. Insurance penetration in 2018 will remain flat at 2.8 percent”, it adds.