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Insurer takes on rivals with monthly premiums

BUSINESS
By Frankline Sunday | July 3rd 2018

Medical underwriter AAR Insurance has launched a monthly premium payment plan in a move set to stoke competition in the insurance sector.

The new payment plan allows the insurer’s 200,000 consumers to settle their premiums monthly. It has dropped the model of requiring lumpsum payments each year before accessing the service.

The firm is betting on the low-income market left out by peers, with the management confident on increasing penetration in the market segment.

“The solution we are introducing fits well into the financial plan of many ordinary Kenyans,” said AAR Insurance Managing Director Nixon Shigoli.

“As a firm, we are keen to lessen the financial burden on them by doing away with lumpsum payments of insurance premiums and introducing manageable and staggered installments throughout the year.”

Corporate clients

The plan, however, excludes corporate clients. It is only available to individuals or retail clients.

Clients will be required to pay a deposit equivalent to two months’ installments then make subsequent monthly payments for nine months.

“We believe that this solution will not only make it convenient for our customers to purchase insurance, but also make it possible for many Kenyans to enjoy the benefits that come with having a medical cover,” he noted.

The firm is rolling out the service through a partnership with the Kenya Women and Finance Trust and other insurance premium financiers.

“We believe that this will be a great contributor to ensuring access of medical insurance and ultimately healthcare to all Kenyans,” said Shigoli.

This comes at a time the insurance sector is struggling with challenges such as changing legislation.

Data from the Insurance Regulatory Authority indicates after tax profit for the sector dipped to the lowest in five years from Sh13.5 billion in 2015 to Sh12.8 billion in 2016.

Gross direct premiums under life and general insurance went down by 25 and 28 per cent respectively.

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