The ever-increasing taxes in the county are affecting Kenyans capacity to buy health and other insurance covers, insurance agents have complained.
The Association of Kenya Professional Insurance Agents on Wednesday said the first casualty in the tightening of budgets by Kenyans trying to live within an ever-challenging financial spectrum is insurance.
“Kenyans have been pushed to the wall by the economic situation so the first thing they strike off from their list of priorities is insurance,” Clifford Ochieng, the association chairman, said.
“A person earning about Sh50,000 or Sh100,000 monthly will quickly strike out insurance because of the ever-increasing cost of living. That affects us.”
He, however, said insurance is one of the most crucial things a person must have and should not be left out in any list of priorities.
Ochieng said insurance penetration is now at 2.43 per cent, a continuation of the decreasing trend of insurance penetration, which has been below the global averages.
This indicates a large, uninsured customer base.
At 2.43 per cent, Kenya has the third lowest insurance penetration rate in sub-Saharan Africa, with South Africa leading at 17 per cent.
This is due to most of Kenya’s population perceiving insurance as a “nice-to-have/easy to discard” product rather than one that is essential, Ochieng said.
The AKPIA chairman said Kenyans only pay for the mandatory insurance because it is law.
“Sometimes you also find people do not buy these other insurance not because they can’t afford but because of lack of information,” Ochieng said.
He said the industry regulator, Insurance Regulatory Authority, is doing a good job in trying to sensitise the public on the importance of insurance.
Health PS Mary Muthoni said insurance agents must ensure Kenyans get value for their money.
She acknowledged that high inflation rates and the poor economy are affecting the insurance purchasing power of Kenyans.
“That is why insurance agents and insurers have to be more innovative. I see these challenges as more opportunities for insurance,” Muthoni said.
She said the government has expanded the base for insurance through its various programmes.
There are more than 60 insurance companies and more than 12,000 insurance agents.
This, the PS said, is an indication of increasing demand for insurance opportunities.
“It projects that the insurance market will grow from Sh1.4 billion in 2022 to Sh8.7 billion in 2030," Muthoni said.
She said the Kenya Kwanza administration is focused on ensuring healthcare is available, accessible and affordable for Kenyans without suffering financial strain.
The PS said insurance is not all about money but quality of healthcare and impact.
“Data-driven approach will ensure clients get value for money,” Muthoni said.
She urged insurance agents to work together with other stakeholders to ensure sensitisation on public health is at the optimum.
“The masses don’t understand the importance of health insurance and of healthcare coverage,” Muthoni said.
She said mobile platforms can be one of the most effective tools for sensitisation.
