The Kenyan insurance market has had a shift in trends over the last 12 months characterized by the number of insurance companies who have developed innovative products to meet the demanding technological shift for the customers.
According to Jane Surungai, the Principal Officer for HF Insurance Agency, the trend is expected to continue shaping the insurance business into the future as it helps the insurance industry to shade off its conservative image.
“Digital innovation has taken center stage and a number of products are now being distributed through mobile apps and/or online portals as is the case with Marine Insurance Cover.” Said Jane.
There is a consciousness that millennials who are a majority cannot be served any other way thus more and more underwriters have taken to digital marketing to keep up with the rapid change of technology.
“With the increasing shift in insurance trends, there are some laws and frameworks that have been put in place as from 2016 to govern how these companies work. Can they be able to cope with each requirement of the Regulatory frameworks?” she said.
According to Jane, the capping of Interest rates introduced in the banking sector in 2016 will continue to impact the insurance landscape. Banks have slowed down their lending to investors which have consequently affected investment in projects that are insurable. This has a direct impact on insurance companies.
Insurance companies are expected to review their credit policy in compliance with the Implementation of the International Financial Reporting Standard 9(IFRS9).
“The insurance companies need to make full provisions of receivables, a process that directly affects partnerships between insurance brokers and agents. Premium payments are generally high, and most citizens love to pay in installments, but the implementation of this regulation calls for the making of tough decisions by the insurance companies for them to maintain their profit margins,” she added.
There is the Statute Law (Miscellaneous Amendments) Act 2017 which mandates the Insurance Regulatory Authority(IRA) to regulate Bancassurance as it regulates ordinary insurance business.
Bancassurance is the selling of life assurance and other insurance products and services by banking institutions. Bancassurance agents, therefore, are required to educate the general public and ensure that they can demonstrate they have done that to the IRA. Failure to which, a fine of 5.5 million shillings will be imposed on the bank. This provision states that Bancassurance agents must give the customers the right to independently choose an underwriter from a list of underwriters who have been licensed by the authority.
These regulations together with the tremendous advancements in technology which are being embraced by millennials, therefore, will contribute to shaping the trend that insurance companies will take in 2018.