Banks jostle for a bite of the insurance pie
From left-Kenya Commercial Bank (KCB) group CEO Joshua Oigara, Jubilee Insurance CEO Patrick Tumbo and Insurance Regulatory Authority (IRA) CEO Sammy Makove during the launch of KCB Group insurance agency business at the Panafric Hotel in Nairobi on April 22, 2015. PHOTO | SALATON NJAU
What you need to know:
- Barclays Bank Kenya will on Thursday launch its life assurance business after receiving regulatory approval last month. The business will operate as an independent subsidiary of the bank and will offer policies for both retail and corporate customers.
- Flexible regulations governing the industry has made it easier for banks and SACCOs to launch bancassurance services and products.
Kenya’s insurance sector is experiencing increased activity with new entrants angling for a share of the market.
Commercial banks are increasingly adopting bancassuarnce while some lenders have gone ahead to establish entirely separate entities to provide insurance services.
Barclays Bank Kenya will on Thursday launch its life assurance business after receiving regulatory approval last month. The business will operate as an independent subsidiary of the bank and will offer policies for both retail and corporate customers.
Barclays Life Assurance Kenya (BLAK) will leverage on the bank’s 122 branches countrywide to distribute its products.
According to Association of Kenya Insurers (AKI), Kenya’s insurance market is valued at Sh120 billion, hence the growing interest by financial institutions.
“Bancassurance is attracting big players in the financial sector due to its high growth potential,” Insurance Regulatory Authority CEO, Sammy Makove said last week.
FLEXIBLE REGULATIONS
The launch comes barely a week after Kenya Commercial Bank unveiled KCB Insurance Agency (KCBIA).
KCBIA will offer insurance services with a focus on life insurance and pensions business.
KCB chief executive officer Joshua Oigara said the new trend will boost insurance penetration in the country.
“Bancassurance has seen success in the developed world and this new trend will deepen roots of banking and insurance industries in Kenya,” Mr Oigara said.
This bancassurance proposition fits within KCB’s game-plan to boost investment in new business lines, revving up growth in its subsidiaries and expanding its foray into the cashlite economy which is billed as the next frontier for growth in the financial services sector, ‘’ Mr Oigara said after the product launch.
Flexible regulations governing the industry has made it easier for banks and SACCOs to launch bancassurance services and products.
“As we grow, the proposition of inclusiveness should be put in place to cover more Kenyans living outside the insurance bracket. Alternative distribution models should be applied on top of the traditional methods,” Mr Makove said.
In March 2014, Kenya was ranked among the top three African Markets in terms of profitability for insurance companies.
The rating from A.M Best, a global rating firm specialising in Insurance put Kenya, Ghana and Nigeria among countries that had expanded insurance penetration despite rampant poverty prevalence.
