Ecobank joins peers in selling insurance

Kenya Bankers Association chief executive Habil Olaka (left) and Ecobank Kenya Ltd Managing Director and Eco Insurance CEO Ehouman Kassi during the launch of the Eco Insurance Agency Ltd at the Norfolk Hotel in Nairobi yesterday. Eco Insurance Agency is a subsidiary of Ecobank Kenya. PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • The lender has entered a deal with three firms — Old Mutual, UAP Insurance and Saham Insurance — through its Ecoinsurance Agency.
  • Leading banks such as Equity, Co-operative and KCB are among those that have introduced bancassurance as a way of tapping the largely underserved sector.
  • Ecobank Transnational Inc, the parent company of the Pan African Banking Group with a presence in 36 countries, has already launched bancassurance services in Ghana and Nigeria.

Ecobank is the latest financial institution to start selling insurance, with the launch of a subsidiary and partnerships.

The lender has entered a deal with three firms — Old Mutual, UAP Insurance and Saham Insurance — through its Ecoinsurance Agency.

The agreements will provide Ecobank customers in Kenya with insurance products.

This comes even as banks and insurance agents have been at each others’ necks, with agents claiming that financial institutions are taking business away from them by packaging banking products together with cover.

“We are positioning ourselves to expand the insurance business through use of innovative distribution channels with the focus on growing the life and non-life business as we seek to increase insurance penetration in the country, which is below 4 per cent,” said EcoInsurance Agency Ltd Chief Executive Officer Ehouman Kassi.

The bank’s insurance agency, in collaboration, will provide general and life policies.

Leading banks such as Equity, Co-operative and KCB are among those that have introduced bancassurance as a way of tapping the largely underserved sector.

Kenya Bankers Association chief executive Habil Olaka said only seven per cent of Kenyans have any form of insurance, adding that there is great potential for banks to expand the sector.

“In a population of 43 million, this is skewed on the lower end, especially when compared to countries such as Egypt and South Africa. Insurance penetration in Kenya is quite low and such alternative channels are applauded,” he said.

Mr Olaka said Kenya should replicate the success witnessed in developed countries, where banking and insurance have grown rapidly in the past 10 years.

Ecobank Transnational Inc, the parent company of the Pan African Banking Group with a presence in 36 countries, has already launched bancassurance services in Ghana and Nigeria for both life and general insurance.

Ecobank is the first to enter into partnership with more than one insurer to sell its products and intends to leverage on the various classes of policies that these companies sell to increase its revenue streams.