× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

Report ranks Kenya high as potential market for insurers

BUSINESS
By Lee Mwiti | February 17th 2016
By Lee Mwiti | February 17th 2016
BUSINESS

Kenya’s positive growth, rising consumer demand, population and new technology make it attractive for African insurance companies outside South Africa.

This was revealed in a report launched yesterday by consultancy firm Ernst & Young (EY). The report titled Waves of Change: Insurance opportunities in Sub-Saharan Africa compares insurance markets in seven countries namely Kenya, Malawi, Tanzania, Uganda, Nigeria, Zambia and Ghana.

The report shows Kenya recorded the highest insurance premiums as a percentage of Gross Domestic Product among the seven countries at 1.9 per cent. It also topped in terms of potential for increased life insurance sales at 35 per cent.

The country also held the first spot among the seven countries when it came to Insurance premiums paid per capita, recording $39 (Sh3,971). All this data was compiled in 2014.

In the same year, Kenya generated insurance premiums of $1.8 billion (Sh183.3 billion), the largest in Sub-Saharan Africa again outside South Africa.

Oxford Economics expects the Kenyan insurance market to grow to $2.2 billion (Sh224 billion) by 2018.

Non-life insurers dominate the Kenyan market and collect two-thirds of total premiums. Nearly half of non-life covers are generated from automotive insurance. Almost another quarter comes from health.

But still given the relative prosperity in Kenya, Insurance penetration remains small with the report citing fraud as a major concern. “A whole 95 per cent of respondents claim insurance fraud is what is keeping them from getting covers,” the report reads.

“Already the most mature among the seven countries in our survey, significant upside potential exists in Kenya,” says Steve Osei-Mensah, EY East and Central Africa Insurance and Actuarial Advisory leader.

“During the first quarter of 2015, premiums grew by 16.4 per cent, according to the Insurance Regulatory Authority. And for all of 2014, gross direct premiums grew at more than 20 per cent,” Mr Osei-Mensah added.

Kenya has also been a leader in developing its M-PESA mobile money platform. A number of insurers already employ it to fund basic insurance coverage, though some executives doubt it can ever replace the traditional system of using agents and brokers for higher-priced or more sophisticated covers.

Share this story
Pwani Oil loses Sh130 million tax demand case
Kenya Revenue Authority (KRA) can now pursue Pwani Oil Limited over more than Sh130 million in unpaid taxes.
CS Najib Balala summoned over stalled project
There have been reports of cut-throat competition between agencies under the Ministry of Tourism.
.
RECOMMENDED NEWS
Feedback