Despite insurers’ efforts to address the complexity and cost of coverage, insurance penetration remains low. Estimates reveal that only three percent of Kenyans are insured.
This low penetration of insurance, relative to other more developed markets has been attributed to factors such as a general lack of a savings culture among Kenyans.
Low disposable incomes and a perceived lack of credibility of underwriters, particularly regarding claim settlement, have also discouraged Kenyans from embracing insurance.
Often overlooked is the issue of scarcity of information, which has kept Kenyans from knowing how and where to access certain insurance products.
According to Treasury data, this information gap has seen the uptake of insurance, both at the corporate and personal levels, remain predominantly in the motor, fire industrial, and medical classes.
Products such as travel insurance, beneficial during the holidays such as, when people travel abroad, have remained relatively unpopular, despite their benefits.
Travel insurance, for instance, helps the insured get medical assistance when a sudden sickness or accident arises abroad.
It also helps to recover costs when a trip is cancelled or cut short for reasons beyond one’s control, or when crucial items are lost, stolen, or damaged during a trip.
More advanced travel insurance covers offer benefits such as repatriation of mortal remains, emergency return home following the death of a close family member, and travel of one immediate family member for compassionate emergency visits, among others.
Strategies for increasing awareness about the benefits of such products can boost the insurance penetration rate.
With over 60 percent of Kenyans able to access smartphones, the use of digital communication channels for instance can help to inform a good number of people about where and how to access insurance.
The effective use of channels such as SMS, radio, and community outreach can help to increase awareness of the benefits of insurance in areas with low digital penetration.
To stand out from the messages that consumers are constantly bombarded with, ensure that the information is delivered in a simple, direct and tailored manner.
Reducing premiums, and co-pays, and simplifying procedures for enrolling, using, or paying for insurance can also help to increase uptake.
Leveraging insights from behavioural science can help insurance providers better understand human behaviour and use these insights to better design and deliver their messages to customers.
This will not only ensure the message is delivered, it will also help to build trust, which has been a major impediment to the uptake of insurance particularly with regard to the settlement of claims.
The writer is the Head of Underwriting, First Assurance Company Limited
