Browsing: Insurance sector in Kenya

Insurance sector (Freepik)

Insurance uptake in any sector is always influenced by the insuring public’s awareness about insurance. Other factors are secondary to the fact. 

A recent high profile insurance round table session discussed insurance penetration based on secondary factors like introduction of affordable products in the market, introduction of bancassurance into the market, agricultural insurance and micro-insurance. Other factors discussed included unhealthy competition in the market which leads to predatory pricing. Public awareness on insurance was touched on based on the need to create a risk management culture among the public and more so to educate the public on the benefits of insurance uptake. This round table however did not expound on how this can be achieved.  

Insurance penetration and its growth in the initial stages was mainly through insurance intermediaries comprising of agents and brokers and this drove insurance growth steadily upwards until the two started being

Insurance claim by policyholder

According to Wiktionary, to claw back is to recover or retake with great effort something that was lost.  

In the insurance industry the words “claw back” are used in relation to insurance commissions that are deemed payable to insurance agents or brokers. The implication of these two words is that commissions paid up to the intermediary are forcibly taken away from them at a future time from other commissions payable for business delivered. The biggest question from this practice is: how legal is this? 

The Eleventh Schedule of the Insurance Act Cap 487 of the Laws of Kenya spells out maximum brokerage, commission or other procuration fees payable after a business is introduced into the insurance company by an intermediary. It is worthy to note that a commission is payable after the company is satisfied that the business so brought has met all the underwriting guidelines and has therefore been

Awards in any field of endeavour signify recognition for exemplary work done in that particular field; it is no different in the insurance sector. That is why insurance awards are highly sought after, with some companies even going to the extent of doing illegal means to get them. 

We have just held the annual insurance awards solely driven by the insurance agents of Kenya. The awards are one of the most competitive and are judged rigorously and fairly by the insurance agents who make up the judging committee. It is fitting that insurance agents get to select and award insurance companies who also form the bulk of stakeholders.  They are the people who know these companies inside out. For this reason few insurance companies are willing to participate because of the many issues that most of these companies have with insurance agents.  

Companies are judged under various

When the Kenyan budget was read back in 2018 in the month of June, expectations were high for the insurance industry that the budget would create an enabling environment to do business.

Various proposals had been fronted from our organisation on what we would want to be included in the budget, among them the recognition of the various industry associations, ours included, and how they would be encompassed into the Insurance Act. However the proposals were not what we expected and the main issue that came out in the Insurance (Amendment) Bill 2018 was that it would be criminal to handle insurance premiums from then on by amending Section 156 of the Insurance Act. What is important to remember is that Section 156 of the Insurance Act talks about premiums handling.

To quote subsection (3) “A premium collected by an agent or a cheque received by him shall be deposited …

When Association of Kenya Insurers (AKI) released it’s 2018 insurance industry report few expected the shocker that the results would provide.

Insurance penetration in the economy relative to the Gross Domestics Product (GDP) fell from 2.7 percent in 2017 to 2.4 percent in 2018. Overall premium increase was recorded to Kshs 216.11 billion from 210 billion the previous year.

The fact that the results showed a decline in insurance penetration in the insurance industry was something that most people didn’t expect especially with the hype that we get of how the economy is doing well.

The results are a true reflection of the industry noting that they are actually audited figures from the various insurance companies. This contrasts sharply with the unaudited figures and subsequent reports that come from those figures always released by Insurance Regulatory Authority (IRA). Perhaps it’s time IRA left that work to AKI if they cannot …