There has been a rise in the uptake of life insurance and savings products as Kenyans tried to shield themselves from the negative effects of the pandemic, sector trends show.
This is expected to continue in the year 2022, captains of industry indicate, with the insurance sector expected to grow with the entry of new players.
Apollo Group chief executive Ashok Shah notes that as new variants of the Covid-19 continue to emerge, Kenyans will continue to shield themselves against the pandemic repercussions.
“As disposable incomes rise, insurance customers tend to choose medical insurance followed by life insurance and then wealth management products. Millions of people lost their jobs, small businesses were forced to shutter, prompting the need to save for a rainy day,” he said during an interview on Friday.
Shah said the Covid-19 pandemic created a tale of two economies: those who were able to save, and those who struggled to make ends meet.
He added that the pandemic has accelerated the importance of building up an emergency savings fund and creating a financial plan.
“More people have seen the need for life insurance, and the number is likely to increase in 2022. As players in the industry, we can boost life insurance uptake by addressing certain myths around life insurance, thrive to become industry experts for consumers to find out what policy best fits them and their financial needs; innovative ways of creating awareness on life insurance,” he said.
Insurance premiums went up by 19 percent in the second quarter ending June 30 2021, to hit Sh144.02 billion compared to Sh121.04 billion in Q2, 2020, Insurance Regulatory Authority data shows.
General insurance business remains the largest contributor to industry insurance premiums, contributing 59.3 per cent of the total premiums at Sh85.36 billion during the period, while long-term insurance premiums stood at Sh58.66 billion in the period under review.
Companies in the long-term business made Sh54.57 billion a 22.9 per cent increase from Sh44.4 billion reported by the end of Q2, 2020.
Total net premium income (NPI) reported by long term reinsurance companies in Q2 2021 declined marginally by 0.9 per cent to Sh1.5 billion, compared to Sh1.52 billion reported in Q2 2020.
“Consumers are looking for solutions to manage their risk in a way that is convenient to them, and insurers need to develop solutions that meet these needs instead of the traditional product-push approach that has been successful in the past,” Shah said.
