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Microinsurance answer to low medical cover

Friday December 6 2019


Patients wait for their laboratory test results at Kisumu County Referral Hospital on October 31, 2019. For most families in Kenya, a medical bill can wipe away a family’s entire savings. PHOTO | TONNY OMONDI | NATION MEDIA GROUP 

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Although public health insurance has been available in Kenya since 1996, most Kenyans still don’t have coverage.

The World Bank notes that only 20 per cent of Kenyans have access to some sort of medical coverage.

For most families in Kenya, a medical bill can wipe away a family’s entire savings and even disrupt the education and upkeep of its dependents.

This scenario is all too common with the alarming spread of non-communicable diseases that require expensive treatment.

This includes diseases such as hypertension, diabetes and cancer, which also affect the common mwananchi, whose traditional healthy staple of arrow roots and porridge has been replaced by roadside chips, sausages and fast food.

According to Ministry of Health statistics published in 2016, an estimated one million Kenyans are driven into poverty every year due to unaffordable medical bills.



Another study by Financial Sector Deepening Kenya says 64 per cent of rural household heads and 55 per cent of urban household heads reported that they would not be able to raise between Sh2,500 and Sh6,000 within three days in the event of a medical emergency.

These studies raise fundamental questions: if the majority struggle to raise money for medical emergencies, how many even bother to do regular check-ups?

Often, the biggest barrier is the cost of premiums and the complexity of the registration and claims processes.

Kenya is ripe for a microinsurance revolution. We are a mobile-first economy. Around Sh4 trillion, which is nearly half of our gross domestic product, moved through mobile-based transactions in 2018, data from the Central Bank of Kenya shows.

The mobile phone brought loans, money transfer and savings products to the mama mboga, boda-boda riders and other hardworking Kenyans in the informal economy. Mobile phones can bring them insurance as well.

A number of solutions exist, but the partnerships to drive adoption are still not as strong as they should be.


It is not enough for microinsurance providers to have mobile apps, affordable premiums and even premium financing solutions.

They need partnerships on the ground with health professionals that have the trust of communities in informal settlements.

These include community health workers, who go from home to home helping mothers and expectant women and ensuring those with chronic illnesses take their medicine.

This is something that Insurance For All (IFA) is trying to achieve through Afya Poa, a mobile money-enabled microinsurance product for low and middle-income earners.

We have partnered with clinics in low and middle-income areas across major urban areas in Kenya.

We also need to look at the broader financial services ecosystem and identify areas where different sectors can build partnerships.


As an example, there is scope for partnerships between responsible microlending firms – such as banks and fintech companies – and micro-insurance companies.

We need to bundle microloan products with microinsurance products and educate consumers on the benefits of these packages.

Although credit is a critical component of financial inclusion, insurance is also key.

These are all conversations we need to have at the national level with the aim of galvanising different stakeholders into action.

Mr Otieno is the CEO of Insurance For All (IFA). [email protected]