Sanlam Kenya plans insurance products through mobile phones

Sanlam Kenya, formerly Pan Africa Life Insurance, has disclosed plans to offer insurance products through mobile phones in an effort to boost uptake.

The insurer last year upgraded its systems to support introduction of new technology-driven services.

Insurance penetration in the country has remained low especially in life business, which is viewed as a preserve of the wealthy.

“The only way to increase penetration of insurance is to use different means away from the traditional agency operation to include digital operations and partnerships,” said Mr Ian Kirk, the chief executive of Sanlam Group.

He, however, declined to disclose the time-lines in which the company is expected to launch the mass market products.
Insurance agents and brokers are the source of 83 per cent of business booked by insurers in the Kenyan market.

The system upgrade by the insurer was, however, problematic resulting in the loss of clients and intermediaries following delays and inaccuracies in premium calculation.

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Sanlam’s new life business sales for last year declined by 19 per cent leading to shrinkage of its market share to eight per cent at the end of 2015 from 9.8 per cent a year earlier, according to data from the Insurance Regulatory Authority.

Rebranded

“What hit us were the initial implementation challenges where there were mismatches but now we are optimising the system,” said Sanlam Kenya Group chief executive Mr Mugo Kibati.

The insurer has rebranded to Sanlam Kenya to identify with its South Africa-based parent Sanlam Group.

Sanlam Group owns 56.3 per cent stake of the listed company, which recently added general insurance to its mainstay life insurance products.
The multinational has made known ambitions to raise its stake in the subsidiary to 60 per cent.

Britam’s attempt to cover the lower end of the market using mobile technology proved costly forcing the insurer to pull the plug on individual sales of its popular Linda Jamii product.

Linda Jamii is a micro-health cover that was launched in January 2014 together with Safaricom and Changamka Microinsurance targeting the underserved low end of the market.

Sanlam will be looking at distributing general and life products through the mobile platform.

Insurance penetration in Kenya remains below four per cent at a time other financial services have been taken up by the public. Financial inclusion is at 75 per cent up from 33 per cent in 2009, largely driven by technology.

The insurance sector has also been hit by erosion of public confidence based on collapse of several providers in the past.

Mr Kibati believes the new risk-based supervision regime, which requires an insurer to hold capital as per the risk it books, will restore confidence in the sector.