AAR Kenya has introduced a new payment plan targeted at individuals in the low-income market with the hope of not only increasing insurance cover penetration in Kenya but also to ease the financial burden of accessing healthcare.
This plan is targeting individuals or retail clients and will involve payments made through a deposit equivalent to two monthly installments and subsequent payments being made over a period of nine months.
The plan is tailor made for ordinary Kenyans who are not able to afford a complete lump sum of premiums per year as is the requirement with the usual payment plans. It aims to reduce financial stress for individuals who feel the need to have health covers but cannot afford the financial requirement.
The firm is working in collaboration with Kenya Women and Finance Trust amongst other insurance premium financiers. The plan does not apply for corporate clients and comes amid reports of the stagnated absence of insurance cover uptake in Kenya.
One of the main reasons for this as stated in the industry report by the Industry Regulatory quarter three 2017 Report (IRA) is the cost of healthcare. Premium cost is not favorable to individuals therefore presenting a challenge of reducing them. This increasing cost of healthcare has affected those covered by private insurance firms.
This innovation follows the Micro Insurance Bill of 2014 that aims to solve this problem by lowering the cost of premiums through sale of micro insurance products to increase the accessibility and customer value of insurance in Kenya. It eases access for low income households.
The IRA report also showed that the business segment has been making losses with the high expense and loss ratios. Increased product innovation such as is expected to increase profits for the industry. AAR boasts of a membership of over 200,000 members spread across the country and hopes to attract more Kenyans to take up this plan.
AAR Kenya last year took a dive with annual profits declining compared to the previous year due to high healthcare claims and difficult operating environment. The growth plan projected is to significantly reduce cost of healthcare and manage it. Retail and small mediums in healthcare are estimated to grow faster due to their vibrancy. This should see the health insurance grow and achieve universal healthcare as outlined in the Big Four agenda.