CORPORATE SCENE
affordability . Any initiatives and interventions aimed at poverty eradication and economic empowerment by Governments and other concerned parties are therefore important .
Secondly is the need to continuously educate the general populace on the benefits of insurance and the products available and to do so as early as possible for example while in Universities or college and by all in the industry . On our part we sponsor awards to students at the University of Nairobi who excel in actuarial science with the objective of encouraging more to undertake the Insurance course .
Lastly there is a dire need for innovation among the players in the industry to offer relevant , affordable products in line with the changing needs of the market . Simply put is the need for relevant innovation as offering the same products does not augur well for the industry . It is important to view the low penetration as latent potential rather than a hindrance . But this will only bear fruit if we are responsive in our product offer and step up customer experience in line with the aspirations of the market .
How has Covid-19 impacted the Insurance Industry in general and Kenya-Re in particular ?
Like all sectors of the economy the effects of Covid-19 have not spared the insurance industry . The pandemic has had a negative effect on the industry on a number of fronts impacting its bottom line . The spike in claims due to rising number of those losing their lives has seen a spike in Life Insurance claims . Added to this is the increase in claims as more people seek medical attention with some being hospitalized . To exacerbate the situation is the reduced ability of some individual and business policy holders to continue remitting their premiums . This results in lower funds for investment by the insurances companies resulting in reduced income .
We at Kenya-Re are feeling the impact too . To begin with , the reduced underwritten premiums by insurance companies ’ leads to a reduction in the amount re-insured . In addition 27 % of our investments are in the Property market . Covid-19 has led to a reduction in occupancy as our tenants require less space given a reduction in head count for some staff working from home . This has reduced our rental income . In addition we cannot even implement the normal annual rent adjustment given it ’ s now a ‘ buyers-market ’ as we say .
Furthermore the secondary market place too is changing especially in the beginning when investors sold their shares to invest in say Gold and fixed income securities . This had a negative effect on the equity market . Moreover companies are in a self-preservation mode and not paying dividends as before . The bottom line is that most investments are earning less and less .
“ 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 . In Kenya this averages about 2.5 % at any point in time which is rather low , compared to say South Africa which stands at 13 %”
Covid-19 forced many organizations to adjust to a new way of working and here at Kenya-Re we had to adjust quickly . The first thing we did was to reduce contact and up to today half of our staff work from home at any one time on a rotation basis . To ensure a smooth transition we provided the necessary infrastructure and also took them through the requisite training . Our ability to be agile and get of the blocks quickly ensured there was minimum disruption in our ability to fulfil our mandate .
Having said that and though Zoom has enabled virtual meetings I strongly believe there is no replacement for physical meetings . However every cloud has a silver lining and a number of new products to cover Covid-19 have been launched and the much needed innovation is being forced on the industry .
Tell us about your CSR activities , their objectives and effect on your brand .
We believe strongly in being sensitive to the society we operate in by giving back as evidenced by our CSR initiatives and programmes . Like everything we do we have been deliberate in the choice of our CSR initiatives . Our strategy was three pronged . To go into an area which we would make the greatest impact , a space that was not crowded and be in it for the long haul instead of hopping from place to place . To this end we were looking for two things ; an unoccupied space that we could own and one that could have a meaningful impact .
We settled on two areas , increasing the forest cover through tree planting , and working with people with disability known as ‘ Niko Fiti - Ability Beyond Disability ’ which we launched in 2011 . We have since supported over 8,600 people with disability by providing assistive and mobility devices such as hearing aids and wheel chairs . In partnership with Kenya Institute of Special Education ( KISE ) we created the Niko-Fiti legacy project . We adopted and rehabilitated a block which serves as the central hub for persons with disability and consists of a hydrotherapy pool , a gymnasium as well as treatment rooms to aid in rehabilitation . We have also handed over modified facilities at Lenana and Moi Girls Schools . We also support businesses of people with disability through flexible procurement rules where a percentage is reserved for them .
Regarding tree planting we have planted over 16,000 trees and counting . Though we don ’ t do this for any purpose rather than to make a difference to society by being a good citizen we have noted increased visibility and addition to our brand equity in the market .
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