Kenya: KCB Group has launched its expanded insurance agency business, as the lender looks to grow its earnings from new business lines. The KCB Insurance Agency (KCBIA) proposition will initially be available in 98 of KCB’s 187 branches in Kenya, before full roll out across the country.
KCB Group Chief Executive Joshua Oigara said the Bank is positioning itself to expand the insurance business through the use of innovative distribution channels with a focus on growing the Life Insurance and Pensions business whose potential has been barely exploited.
Through collaboration with a range of Kenya main insurance companies, KCBIA will offer seven different varieties of insurance–including Property, Liability, Motor, Healthcare, Agriculture, Micro, and Marine Insurance. In addition, KCB Insurance Agency offers Risk Management and professional insurance advisory services to its clients, with plans to launch Life Insurance products in later in the year. The launch of KCBIA cements KCB’s push for strategic partnerships in a bid to deepen financial inclusion.
“So far, the Bank has successfully rolled out a five-year strategic plan that has helped KCB consolidate its position towards realization of its goal of being the preferred financial services provider”, said Mr Oigara.
The moves comes after the launch of a new model dubbed Bank Insurance Model (BIM) that will move all insurance services in the country to the lenders.
To ensure efficiency in service delivery, KCB has acquired and fully implemented the Turnquest IT Bancassurance software to support operations and automation of all functions in the Insurance Agency.
Insurance Regulatory Authority (IRA) CEO Mr Sammy Makove said that both the Bank Insurance Model (BIM) and the Traditional Insurance Model (TIM), will run parallel to maximize the potential of the insurance service acquisition to Kenyans while maintaining acquisition costs at manageable levels.
“As we grow, the proposition of inclusiveness should be put in place to cover more Kenyans living outside the insurance bracket. Alternative distribution models should be applied on top of the traditional methods,” said Mr Makove during the launch.
Bancassurance has seen success in the developed world; this new trend will deepen the roots of banking and insurance industries in Kenya. The insurance sector has witnessed rapid growth over the past decade, with written premiums reaching compound annual growth rates (CAGR) of 15.1% between 2004 and 2014. In the 12 months ending December 2014, KCB’s bancassurance business saw profits rise by 268% year-on-year to KShs 155.2 Million from KShs 42.2 Million. Premiums stood at Kshs. 1.5Billion at the close of last year.
“This bancassurance proposition fits within KCB’s game-plan to boost investment in new business lines, revving up growth in its subsidiaries and expanding its foray in the cashlite economy which is billed as the next frontier for growth in the financial services sector,” said Mr Oigara.
“For us, partnerships are meant to make financial services more accessible to the general population. This is a crucial part of our effort to make serious progress in addressing the deep poverty experienced by millions of citizens across the East African region and beyond, many of whom remain outside the formal financial system”.
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