Star Writer Lola Okulo interrogates director of the Insurance Institute of Kenya Caroline Munene, the body charged with promoting ethics and professionalism in the insurance industry which currently suffers from low market penetration partly because of mistrust of industry employees and agents by consumers. Munene is also the general manager at AAR Kenya.
According to the description of your mandate, IIK is the body in charge of registering and monitoring insurance professionals in Kenya. How come most complaints from insurance service consumers stem from unethical practices by insurance industry employees yet your organisation is in operation?
Insurance, either as a product or service is complex and requires time to understand for both the consumers and those in the industry. If this does not happen, then there will be misunderstanding of expectations. The institute therefore advices that people take time when selling or buying insurance so as to understand what they are selling or buying.
However the industry is making good progress in raising professional and ethical behaviour in the sector and recently the institute has launched the code of ethics with the cooperation of Insurance Regulatory Authority.
In addition the institute is pushing for legal recognition through a legislative bill – This will help in regulating professionals and give a legal mandate for the Institute to take action against unethical professionals.
When you say you monitor insurance industry professionals, how exactly do you carry this out?
We register all professionals in the sector and also have forums for the professionals to meet and exchange ideas.
Through IRA, we raise issues on unprofessional behaviour in the industry. We caution members caught in any form of misconduct.
To caution only? Any challenges you face as you carry out your mandate?
Self regulation, which is aimed at stemming out bad practices, is not well embraced. There is need for IRA and other bodies to come in and lay ground rules. There is intense competition among individuals and companies in the industry as they get all business minded – as a result they don’t always consider what is best for them and the customer.- It’s an issue of 'business first'.
The other problem is that the is little reading culture in Kenya, a good number of people don’t want to read or involve themselves in continuous development which is very important in any industry.
Insurance industry fraud reports every year show company workers and agents are one of the main sources of fraud cases or at least in some cases they abet fraudsters blatantly swindling insurance companies millions. What can your institution do to stop this vice?
When it comes to fighting or eliminating fraud cases, responsibility rests on individual companies. However the institute recommends that companies maintain a good ICT system and also ensure proper processes are in place to minimise fraud.
What penalties do you mete out in case someone has breached the code of ethics?
We are working to ensure that we get a legal mandate by end of next year which will enable us take legal action but until then, the much we do is caution errant members.
Speaking of the code of ethics which was launched two years ago, is it being adhered to and if not how many professionals have you penalised or gave warnings to for breaching the code?
Again, since we don’t have the legal mandate in place, we encourage people to adhere to the code of ethics which would then eliminate penalty cases.
Kenya has a serious shortage of actuaries and there is also need for more agents to infiltrate the grassroots and make insurance available easily. How come IIK is not seen in initiatives to drive up these numbers and it is almost always the IRA that seems to be working on plans to address this issue?
IIK has limited resources to support programs for the development of actuaries and agents. However, we are coming up with forums – like the conferences which help in reaching out to more actuaries and agents with insight to help them improve their professional standards.
What was the theme of this year's annual IIK conference that you held on Friday?
Banking on technology and innovation to increase insurance penetration and growth.
Last year the annual theme was positioning the insurance industry in a devolved system of government. Following those deliberations last November, how has the Institute been able to work towards realisation or implementation of this goal?
IIK’s role is mainly not on implementation but thought leadership. This ensures that the theme is relevant and beneficial. We then encourage leaders and industry players to take up the ideas through the implementation to results stage.
What plans do you have in the short term to make the institute more formidable and a vibrant contributor to professionalism and consequently market growth of the sector?
We plan to have the legal mandate in place by end of next year. Then, we will engage effectively with all stakeholders in the industry and discharge all other mandates in regards to raising the standard.
In your opinion, what can professionals in the insurance industry do better to increase penetration of these services into the market?
Simplify insurance products and services so that consumers have a better understanding of what they are buying.
Simplify all communication to consumers and even make it available in all languages so that we reach out to people in both rural and urban areas.
Have all agents and intermediaries well informed, trained and engage professionally.