The role of innovation in growing local insurance industry

Resolution Insurance Kenya Managing Director Alice Mwai (PHOTO: Courtesy)

The Standard Writer Fredrick Obura spoke to Resolution Insurance Kenya Managing Director Alice Mwai on the role played by innovation and creativity towards the development and growth of the local insurance industry. Here are excerpts.

Q: How has innovation played a role in the development of insurance industry in the country?  

A: Innovation and creativity has become a critical ingredient for achieving success in the insurance sector in the country. The need for developing creative solutions has arisen as more and more customers become enlightened and knowledgeable and seek value for their money. Creativity goes hand-in-hand with innovation. While creativity is the ability to produce new and unique ideas, innovation is the implementation of that creativity - that's the introduction of a new idea, solution, process, or product. If you may recall, we are well known for our innovation and creating industry benchmarks; we have several firsts to our credit including offering individuals HIV/AIDS, dental/optical and maternity covers. Simply put, our approach to insurance is to create simple, quality and innovative solutions.

Q: How do you make your products different from the rest of the competition?  

A: As Resolution Insurance, we seek to first understand the needs that our customers are looking to satisfy or problems that they are looking to solve. We then get our different teams together to create a product that responds well to the need and at the right price.  We work hard to use a language that is understood by non-insurance people and have eliminated any ‘fine print’ of which insurers are accused of. For us, what you see is what you get. After launching the product we use a number of ways to keep our selves informed about whether the product responds to the need effectively but also to be aware should the need change or should there be a more effective way of achieving the same.  You may be aware that we have expanded our products to include a variety of Medical Plans, Travel Plans, Liability Plans, Property Covers, Motor Covers, marine covers among others

Q: What are some of the incentives given to the industry?

A: There is the Insurance Premium Tax Relief which is a benefit offered by the Government to all life and medical insurance policyholders. Under the relief, a tax payer enjoys relief of 15% of premiums paid in a year. We also endeavour to encourage Kenyans to purchase insurance towards helping them manage their risks.

 

Q: The National Treasury proposed the introduction of Financial Services Authority (FSA) Bill to Parliament for debate in the 2016/2017 budget. What is your view of this bill?

A: This is envisaged to provide for the consolidation of the four financial sector regulators namely the Insurance Regulatory Authority, Capital Markets Authority, Retirements Benefit Authority and the Sacco Societies Regulatory Authority. The proposed consolidation is expected to increase efficiency in supervision of the financial services sector. 

Q: What role has education played in developing the industry?

A: The insurance industry in the country faces challenges such as negative perception and very technical communication, what you would call ‘insurance speaking’. This is a major hindrance to understanding of what one is actually buying and hence very slow update of insurance covers . There is a need to continuously simplify both in volume and language, the documentation we use as insurance all the way from registration to claims settlement

Individual insurance companies have started to recognize this and are simplifying the way we deliver services and improving client understand of the product mostly through technology and client education. At Resolution Insurance for instance we held our Wellness Fora in previous years and continue to conducts open days to educate and encourage our clients them to pursue wellness in order to delay the onset of lifestyle diseases and prevent communicable diseases

The Insurance Regulatory Authority (IRA) is also helping the industry having conducted several outreach activities targeting various segments of the public.

In addition, the Association of Kenya Insurers (AKI) has committed to increasing awareness about insurance among the public. The Association carries out various initiatives to achieve this including consumer awareness campaigns on various communications platforms, publishing of informative publications and answering questions that are frequently asked with regard to insurance.

Q: What are the measures being put in place to enhance insurance penetration?  

A: As you may recall, the Government did amend the Insurance Act to facilitate the industry to move towards risk based solvency framework and a more principle based investment framework. Further, additional amendments were proposed to expand the allowable forms of capital and reflecting the new gross premium valuation methodology across different classes of business. Similarly, the government reduced the maximum time in which a claim settlement should be settled from 90 days to 30 days in order to protect insurance policy holders from long delays. Starting January 1, 2017 the law now requires that all insurance covering import of goods must be purchased from the local market. The IRA has also been on a training and recruitment drive to increase the number of insurance agents in the country.