CIC launches cover for low-income earners
By Jackson Okoth
| Oct 3rd 2012 | 2 min read
By Jackson Okoth
Low income earners, who are still excluded from the formal insurance business, have a reason to smile following the entry of Nuru ya Jamii, a cover for low income earners, sold by CIC Insurance Group.
The cover allows those living in slums, which are prone to fire, to insure their household goods for as little as Sh480 per year (Sh40 per month).
This insurance product is the first policy targeting low-income earners that combines property insurance and life assurance as a package.
The policy has three benefits, which include cover for household goods in the event of fire, family disability due to death, and family life.
CIC Insurance Group CEO, Nelson Kuria, said the policy would spread insurance awareness and services to low income earners who have been locked out by conventional insurance products.
Speaking when he unveiled the new insurance policy in Kibera’s Kamukunji Grounds, Kuria said the policy would leverage on mobile money transfer service, M-Pesa, for payment of premiums, and lapses once a claim has been paid.
“We are proud of being able to insure the a cross-section of Kenyans in the informal sector, including hawkers, Jua kali workers in places like Kamukunji, mama mboga in Wakulima market, and small traders in Gikomba market,” said Kuria.
High premium rates
Low-income earners have been largely ignored by insurance firms who lean on the middle-class with products characterised by high premium rates.
Mr Kuria described micro-insurance as characterised by low premium and low caps or low coverage limits, sold as part of risk-pooling, and designed to service low-income people and small and medium businesses.
Though micro-insurance is undoubtedly the new frontier for insurance growth and holds high potential for deepening the coverage of insurance services, pricing is not its only stumbling block.
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