You work hard and carefully plan for your money. You ensure that you make calculated investment moves but are you covered against risk? Is your future safe from real money worries?
Are you aware of the risks that you carry and how insurance can play a huge part in your family’s, company’s and own financial stability and economic growth?
In a high risk environment and an educated growing urban population with higher disposable income levels, it is crucial to ask why Kenya’s insurance sector has not taken its position in the global industry playing field.
The answer may partly rest in the lack of sufficient consumer education on the vital role insurance plays in ensuring financial stability for companies, families and communities.
With economic growth expected to rise to 5.9 per cent in 2016 and 6.1 per cent in 2017, according to a report by the World Bank, Kenya’s economy spells hope.
News commentaries, reports from established institutions and foreign investors all convey a similar message; Kenya has the potential to be one of Africa’s success stories.
Insurance companies in Kenya have in the past few years aggressively positioned their brands in the market with heavy investments into their marketing campaigns. Insurance advertising messages carry faces of happy customers to depict that they will deliver on their promise.
All these efforts are admirable but the lack of continuous insurance education has had a direct impact on consumer ignorance contributing to the apathy observed towards the industry.
Each day, we are faced with risks that revolve around our health, physical assets, and our capability to provide for our future or those who depend on us. For instance, accidents are not selective and they can happen to anybody.
The differentiating factor is in how well prepared one is for unexpected occurrences allowing one to bounce back with the protection provided by insurance.
In simplest terms, insurance allows the policy holder to transfer the cost of potential loss to the insurer in exchange for a fee known as the premium. Insurers then invest the money in order to pay a claim if and when raised.
We must bear in mind that shared risk protects a growing economy and as a result, delivers growth in the insurance industry.
While the growing middle class has had a positive impact on the Kenya insurance industry, there remains a huge untapped market that has no access or lacks adequate information on the role insurance plays in their day to day activities.
This lack of insurance penetration not only has a negative effect on loss of physical investment but also on human capital.
Government bodies have increasingly realised their role and have rallied Kenyans to enroll and contribute towards their NHIF accounts.
This is a significant step in the right direction as access to basic healthcare is made possible but there is a long way to go. Demystifying an industry that has been in existence for centuries will open up new opportunities that drive economic freedom.
Although widespread poverty remains a serious hindrance to the insurance sector growth,industry players must continue to strive to create awareness to improve consumer confidence.
It is important that the Insurance Regulatory Authority and the Association of Kenyan Insurers continue to ensure that players in the sector abide by set rules.
Insurers must conduct business with customer centricity being at the focus of their market penetration strategy.
Transparency between the insurer and customers will spur further uptake resulting in the industry growth.
Chinyemba is the country head for Metropolitan Cannon in Kenya, the MMI Group chairperson for the EA Regional Growth Hub.