CORPORATE SCENE
“ Re-insurance involves the transfer or “ ceding ” of some of the financial risk ’ s insurers assume in insuring cars , homes and businesses to another insurance company , the reinsurer . In simple terms , reinsurance is the insurance for insurance companies .”
covers for Tanzanian imports must be effected by a Tanzanian insurer .
The Development of the Marine Insurance : In spite of confirmation of the Treasury Cabinet Secretary requiring importers to use local insurers for marine insurance , marine insurance has failed to live up to its bill of rejuvenating the short term insurance . The line saw a 39.7 % increase in premiums from KES . 2.6B to KES . 3.6B despite the value and volume of imports having risen significantly .
We also face competition , and it is important to note that some of our competitors need not have a physical presence in the markets we operate . Being number one means that everyone tries to gnaw at our market share .
Outline the key strategic pillars you anchor your business on .
If I could narrow it down to one thing I would say we are intentional in everything that we do , and we believe in proper planning . This has been possible through implementing strategies that are anchored in our five strategic pillars outlined in our 2017-2021 business plan . These are : Financial Performance : Where we aim to achieve sustainable robust financial performance to grow stakeholder value ; Business Process : We aim to maintain systems and processes that address business needs and stakeholder interests . This has improved our efficiency enabling us serve our customers better while reducing our operational costs ; Business Development : We aim to grow and diversify quality portfolios that meet the ever changing market needs for business sustainability ; Risk Management : We continuously aim to maintain robust risk management initiatives to achieve our corporate objectives . To enhance our capabilities in this area we use Risk Management & Compliance software to make management in this area more robust ; People & Culture : Regarding our people we ensure they have the right tools and skills and we quickly fill any gaps that can get in their way of being productive and matching our performance requirements . We aim at developing human resource capabilities and culture to match the Corporation ’ s performance needs .
What would you say is your unique value proposition ?
I can confidently say that our Unique Selling Proposition ( USP ) is that we are reliable , and therefore trustworthy partners not just to our primary customers but to all our stakeholders in general , and have been so for the last 50 years and still counting . We continue to build a solid Corporation ensuring our brand is visible by taking part in relevant events that give us a platform to increase our visibility . Examples include Golf , CSR activities , and cocktails which together with a well cultivated good relations with the media and use of other communication channels , on line and off line , keep our message alive out there .
Kindly touch on Insurance penetration in Kenya
Research by Insurance Regulatory Authority ( IRA ) and international firms such as Statista Research indicate that the penetration of insurance in Kenya averages 2.5 % per annum . This is rather low compared to South Africa at 13 % and Taiwan at 17 % respectively .
Insurance penetration is a measure of the appetite and uptake of all the available insurance products and is calculated as a percentage of insurance premiums relative to a country ’ s GDP at a particular point in time . The poor uptake in Kenya is a result of a low appetite and uptake of insurance products available . The penetration is even lower if one removes the compulsory products such as motor and WIBA .
This low penetration can be attributed to four factors . The first , which is common in most developing countries , is the awareness of the need and benefits of insurance . People buy things that they know of and are clear of the value they are deriving . The awareness of the available insurance products and their benefits is low in Kenya .
The second reason is affordability . Given Kenya ’ s low income per capita , only a small percentage of the populace can afford to pay for insurance especially products such as life which are not a legal requirement . Most people have more pressing needs to meet with their limited disposable income . This means that as a country we lack the critical mass necessary for a meaningful increase in penetration .
I can describe the third reason as ‘ malpractices ’ in particular price undercutting by the insurance companies that result in lower premiums . There are two reasons why undercutting is so common . The first is the stiff cut throat competition . But the underlying reason is the similarity of products on offer . Undifferentiated products offering more or less the same benefits provide a fertile ground for price undercutting . This duplication is due to lack of or slow pace of innovation in the industry . Undercutting , which undermines the growth of the industry , is not sustainable in the long run .
Another factor could be the practice of slow payment of claims resulting in a negative perception of the insurance industry . Even though not all insurance providers delay payments nor does it happen all the time , it has a blanket negative effect on the industry as a whole further discouraging uptake . A sceptical and apprehensive target customer is a hesitant one and harder to convince to buy insurance products .
Having said that there are new opportunities emerging for example in the area of oil and gas which is set to grow and become a significant sector in the economy . Also given that we have a youthful population there is an opportunity to tap into the market going forward with relevant products , leveraging on technology .
So what can be done to encourage the uptake of Insurance Products ?
Firstly is the need to increase
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