Africa Re says the adoption of technology will benefit both insurers and clients.
Insurance penetration — the total written premiums as a percentage share of a country’s gross domestic product (GDP) is still low in Kenya due to high cost of premium, fraud, lack of trust and ignorance by members of the public.
The Insurance Regulatory Authority (IRA) data shows that last year the penetration rate declined to 2.68 percent from 2.71 percent in 2016.
The African Reinsurance Corporation (Africa Re) says investment in technology by insurance companies will lead to job losses, but benefit the entire industry through cost-cutting and increased penetration.
The Lagos-based Pan-African reinsurer is pushing Kenyan insurers to embrace technology to reach more people and redeem their image, which has been shrouded in fraud and delayed claims settlement.
African Re group managing director and chief executive Corneille Karekezi speaking on Tuesday in Nairobi during the firm’s industry leaders and stakeholders forum said adoption of technology will benefit both insurers and clients.
“Technology must be embraced, it is the only way…because we have tried over the last 50 years to multiply the number of sales agents, branches and even staff, and we are yet to achieve our desired goals,” said Mr Karekezi.
“A software/an application can explain better than a person and respond to all queries within a short time and effectively,” Mr Karekezi said.
“Training people to respond to questions, identify the needs of clients and explain to them appropriately requires huge investments and currently this is not cost-effective to many insurers.”
Insurance penetration — the total written premiums as a percentage share of a country’s gross domestic product (GDP) is still low in Kenya due to high cost of premium, fraud, lack of trust and ignorance by members of the public. The Insurance Regulatory Authority (IRA) data shows that last year the penetration rate declined to 2.68 percent from 2.71 percent in 2016.
According to data from Swiss Re Sigma Report, South Africa has the highest penetration rate at 13.76 percent with Nigeria, which has the largest economy in the sub-Saharan region recording a penetration rate of 0.25 per cent.
Lately, some insurers have made substantial investments in the development of the transmission of claims electronically, wider use of biometric identification cards and digital mobile apps and artificial intelligence.
Africa Re was established in 1976 by 36-member states of the African Union (AU) and the African Development Bank Group (AfDB). Currently it has 41 member states including Kenya.
Its shareholding is split between African (75 percent) and non-African (25 percent) investors.
African shareholding comprises 41 states, the AfDB and more than 100 African insurance/reinsurance companies from the 41-member countries.
The reinsurance was established with an aim of reducing outflow of foreign exchange from Africa by retaining a substantial proportion of reinsurance premiums generated therein.
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