Kenya’s insurance sector looks bright and is expected to rebound this year after experiencing headwinds last year, the latest report by Ernst & Young shows.
According to the survey, growth in the life assurance sector will be driven by the demand by the youth.
‘’More young people are entering the job market faster than at any other time in our history, a trend that will be sustained for the coming decades,’’ Ernst & Young report said.
This is good news to the sector whose profits plunged by a staggering 61.5 per cent in 2018.
The non-life business posted the biggest loss of 26.6 million compared with $9.5 million recorded in 2017 with the motor sector leading the pack in losses at $25.7 million.
This was attributed to the massive decline in profitability to the capping of interest rates introduced in 2016 which continues to have a ripple effect on business because lending to insurable investment projects and assets remains constrained.
According to the survey, demand for all types of insurance common to workers will grow. Furthermore, pensions funds will balloon and the sheer number of clients seeking insurance will also grow, leading to more opportunities and growth in the sector
It advises that Insurance companies must do their best to ensure they meet the aspirations of the millennial as they develop new products and as they device new methods of serving their customers.
While Kenya leads the rest of East Africa when it comes to penetration, a 2.9 per cent penetration rate is still rather low compared to mature markets like South Africa with penetration figures reaching up to 14 per cent.
