Liberty Kenya's life business eyes top three spot in six years

Liberty Kenya plans to become one of the top three life insurers by market share in the country, whose potential has attracted the likes of British firm Prudential Plc.

Annual life insurance premiums amount to just one per cent of Kenya's economic output of $42.6 billion, while only about four per cent of the population estimated at 40 million have life cover. Some have group cover offered by employers.

Abel Munda, the managing director of CfC Life - which makes up half of Liberty Kenya, with the rest being Heritage Insurance, which specialises in general insurance - said there was immense opportunity in the east African nation for insurers.

His company aims to increase its life business market share to about 15 per cent in the next six years from 9 per cent, through new distribution channels and products.

That would elevate it from fifth spot to jostle with current top three Britam, Pan African Insurance and Jubilee.

READ: Jubilee Insurance extends market lead over Britam

UK's Prudential entered the market last month after buying the life business of a failed Kenyan insurer, Shield Assurance, also to take on Britam and Pan African Insurance.

READ: British insurer takes second stab at Kenyan market

One of the biggest challenges that insurers face in the Kenyan market is lack of awareness of life cover, Mr Munda said.

"It is not only the person in the village who is ignorant. Majority of the public still are ignorant particularly about life insurance," he told Reuters in his Nairobi office.

Kenyan insurance firms have in the past relied on agents and brokers to sell their products thus limiting their reach.

Mr Munda said the answer lay in partnering with banks, retail chains, investment clubs and mobile phone operators to increase distribution of products.

He said the insurer was now reaching out to potential customers in the rural areas, while also rolling out new products like a pension plan that allows customers to choose how their money should be invested.

"The public has become investment-savvy as opposed to the 80s and the 90s when they were not," he said.

"Now people know about shares, people know about fixed-income and all those things and it is important that you give them the opportunity to choose."

CfC Life, which has Sh22 billion ($246.50 million) in assets, was founded 50 years ago, and is in the process of transforming into Liberty after it was acquired by the South African insurer four years ago.

Individual life insurance policies in Kenya had stood at about half a million for as long as he could remember, Mr Munda said, while other financial products, like bank accounts had risen to 16 million from 800,000 in the past decade.

READ: Life cover payouts double to Sh10.2bn in three months

Kenyan insurers are lobbying the government to exempt all premiums from taxes in order to encourage more people to buy it, Mr Munda said, adding they were also carrying out public education campaigns on the benefits of insurance.