Even though insurers in the African country have been bringing in billions, they are still bleeding money.
The Kenyan insurance industry has always faced struggles in selling to the majority of the residents of the country, but despite the fact that it has been bringing in billions, money is still being lost in every direction.
The sector continues to have a penetration beneath 4 percent, as has been the case for over 60 years.
This has been the case since the first insurer established the insurance industry. That company was British owned and opened up an agency outpost in what was still colonial Kenya. Even though six decades have passed since that time, only one in every forty people in Kenya has purchased some type of policy, whether individually or as a part of a group plan.
The insurance industry in Kenya has some strength in only very specific sectors of coverage.
PriceWaterhouseCoopers (PWC), a consultancy firm, has released data that suggests that the greatest coverage uptake in the Kenyan insurance industry – both on a personal and business level – is primarily focused on vehicle, fire, personal injury, and industrial sectors. PWC stated that this indicates that there is not a positive attitude toward personal coverage overall, and that this perspective helps to exacerbate the situation of low penetration in the country, when compared to markets that are more developed.
The Insurance Regulatory Authority’s insurance industry statistics indicate that the adoption rate of coverage products in Kenya is growing, but it is a very slow process. A report that was released at the end of this year’s first quarter indicated that gross written premiums experienced a 16.7 percent increase during those first three months when compared to the same time period in 2012.
Though that does make it appear that the insurance industry is experiencing very positive growth, deeper analysis has indicated that the same insurers that are collecting that income are also bleeding out nearly as much as they bring in. Those figures have been problematic for decades in Kenya and are the primary reason that at least six insurers and underwriters have gone under in the same number of years.