Jubilee Insurance will send home 52 employees as part of its restructuring process aimed at complying with new regulations.
The company will soon be split into three entities as the listed insurer moves to comply with the regulatory requirement to separate long-term and short-term businesses.
The separation, which will see medical and general insurance businesses operate independently, will result in about 8.2 per cent of the 628 full-time positions being declared redundant.
Group Chairman Nizar Juma (pictured) said yesterday the affected employees and their dependents would continue to enjoy their medical insurance benefits for at least three months.
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Mr Juma said they will also be offered counseling arranged through a firm that specialises in employee welfare.
“This firm will also offer financial planning services and advice in addition to outplacement services were required to support each individual as they transition into new career paths,” he said in a statement.
The existing company will continue to operate the individual and group life insurance, pension and annuity businesses and will be renamed Jubilee Life Insurance Limited.
Jubilee Health Insurance Ltd and Jubilee General Insurance Ltd will, on the other hand, operate the medical and general insurance businesses respectively.
Juma said all three businesses have been licensed to operate by the Insurance Regulatory Authority. He said the insurer is in the advanced stages of legalising the three companies.
Local and international regulatory requirements now require firms to carry out long-term and short-term insurance business in separate corporate entities to safeguard policyholders’ funds.
Besides chopping its workforce, the exercise will also see the transfer of Jubilee Insurance Company of Kenya staff to their respective companies and the identification of staff to be shared by the three companies.
Juma said the split of the business will provide more focused service delivery to the insurer’s customers.
“We are committed to providing the best to our customers and the split will provide opportunities to simplify and strengthen our operational model and further enhance both service delivery and efficiency.”
The separation might also require the company to recapitalise the businesses to carry weighted risk and trigger the appointment of three new principals to head the separate entities.
As of June last year, Jubilee, which is one of the largest insurance companies in the region, had assets valued at Sh124.3 billion or nearly 20 per cent of the total industry assets.
Although gross premiums during the period rose by Sh2 billion to Sh20.7 billion, increased expenses saw profits decline to Sh1.83 billion from Sh1.85 billion.