Kenya expects new players in the lucrative insurance sector who will help cut cost of the services, the regulator has said in a forecast.
Sammy Makove, the chief executive of the Insurance Regulatory Authority, told a meeting of actuaries yesterday that the growth opportunities in the insurance business were attracting new firms but did not reveal if his office was currently considering any prospective entrant.
“We are witnessing mergers, acquisitions and new entrants into the local market. No doubt these actions are indicative of the industry’s worth and potential and we hope that with all these new developments, we will be able to realize our penetration projections and make insurance services not only affordable but also accessible to Kenyans,” Mr Makove said.
Gross premiums hit Sh157 billion, rising more than 16 per cent in 2014 over the previous period, according to the regulator.
But even with that growth, insurance penetration was still below four per cent, partly due to high costs and ignorance among the local population.
His prediction about new entrants was based on recent events in the sector where UK’s Old Mutual Holdings acquired a controlling stake in UAP in one of the largest transactions in recent times. Locally, Jubilee Holdings has announced plans to acquire two or three smaller rivals, while Britam completed acquisition of Real Insurance.
Makove was speaking during the launch of the annual convention of actuaries - professionals whose role involves determining risk and evaluating its financial implication.
IRA, he said, had provided scholarships to 25 actuaries over a five-year period who have studied Master's programmes at the Cass Business School in London.
Kenyan insurance firms have had an acute shortage of actuaries, often turning to other African countries for the services. Several local universities have since moved in to offer the course at the undergraduate level, attracting thousands of applicants every year.
James Olubayi, president of the Actuarial Society of Kenya, said the profession plays an important role in the prudential management of insurance companies, commercial and investment banks, employee benefit schemes and other financial institutions.
He said actuarial skills, however, are also more important in many other fields to resolve the challenges of the increasingly complex financial risks that modern society faces. Kenya has 27 actuaries of whom 20 are resident.
