Latest reports indicating that Nairobi contributed more than 80 percent of the insurance premiums paint a picture of an industry that has a lot of work to do to capture unexploited market.
Nairobi accounts for only 21.7 percent of the national wealth, according to the Gross County Product (GDP) 2019 survey released earlier by the Kenya National Bureau of Statistics.
That means at any point in time, the contributors of 78.3 percent of the national wealth are outside the capital. The list is long.
Agriculture that accounts for a quarter of the GDP is mainly rural-based. The shipping industry and port-based firms that handle more than 90 percent of Kenya’s import and export trade are domiciled on the Coast. Real estate and construction, which have been booming for several years now, cover the entire length and breadth of Kenya. The same could be said of manufacturing that takes place in nearly all the 47 counties.
To be sure, the GDP 2019 survey shows that national wealth is somehow distributed evenly among the top nine counties — Nakuru, Kiambu, Mombasa, Machakos, Meru, Kisumu, Nyandarua, Kakamega and Uasin Gishu — which follow Nairobi in that order. The nine cumulatively account for 32.6 percent of the national wealth.
Yet the latest insurance industry data shows for premiums, Nairobi generated Sh173.2 billion while the other 46 counties had a total of Sh41.5 billion in 2018.
The insurance industry itself doesn’t appear to have straight answers on why premium payment does not reflect economic strength of a county. But the sector should.
May be most properties, enterprise and lives based outside the capital have been left exposed to risks. Maybe the 54 insurance firms are headquartered in Nairobi and therefore are concentrating their marketing and product education on the capital city.
Or, they have taken innovation to mean producing new products for Nairobi audience, thereby neglecting a huge potential market that hold the key to improving their bottom lines.
Whatever the case is, the latest data shows insurance industry still has a long way to go before it can record a penetration rate of five percent of GDP.