Last year, Consolidated Bank advertised for the position of bancassurance manager with the bank saying the hire would be expected to make the product a significant contributor to the bank’s profitability.
Insurance penetration in Kenya remains low but Mr Kiyai reckons that with some loan products requiring insurance of the collateral, banks are poised to win clients.
Bancassurance has taken form in Kenya with several banks and insurance companies partnering to offer various products within the banking halls.
State-owned Consolidated Bank of Kenya is set to open its bancassurance arm in the first quarter of the year as it seeks to diversify revenue streams and get out of loss-making territory.
Thomas Kiyai, the chief executive officer, says operationalising the unit will give the lender room to grow non-funded revenue as it also counts on potential Sh3.5 billion capital injection to increase its loan underwriting deals.
“Before end of March, we will be launching our bancassurance subsidiary,” he said.
“There is still a huge opportunity and I believe commercial banks like us have the capability to replicate the successes in banking business into backassurance.”
Last year, Consolidated Bank advertised for the position of bancassurance manager with the bank saying the hire would be expected to make the product a significant contributor to the bank’s profitability.
Insurance penetration in Kenya remains low but Mr Kiyai reckons that with some loan products requiring insurance of the collateral, banks are poised to win clients.
Consolidated Bank also wants to revamp trade finance products such as guarantees and also ride on its digital products to grow the lender’s money transfer business. It launched its digital banking platform last year.
Bancassurance has taken form in Kenya with several banks and insurance companies partnering to offer various products within the banking halls.
Since making its debut in Kenya in 2004 with the awarding of the first insurance agency licence to Commercial Bank of Africa, bancasurance has continued to attract more players.
More than 26 banks and 47 insurance companies have adopted bancassurance model including Equity Bank #ticker:EQTY, Diamond Trust Bank #ticker:DTK and Faulu Bank.
In 2014, the Insurance Regulatory Authority introduced a law compelling all banks conducting bancassurance to give customers the freedom to choose their insurer.
This was to ensure that all insurance firms on the model enjoy a level playing field.
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