Insurance firms urged to introduce short term covers

Different insurance covers.
Different insurance covers. PHOTO/COURTESY:

Local insurance firms have been urged to roll out insurance products of below 12 months in order to attract the country’s youth who are drawn to affordable packages.

According to a news report by the Business Daily, Tom Gichuhi – the Chief Executive of the Association of Kenya Insurers (AKI) – insisted that actuaries should work hand in hand with insurance providers to introduce innovative short term covers for the country’s young population.

“If we keep on insisting that our products must be annual and we are not able to come up with short-term covers that are reasonably priced, we will one day wake up as dinosaurs,” the AKI Chief Executive  is quoted as saying by the Business Daily during an industry event convened by ZEP-RE and CIO East Africa in Nairobi.

On her part AIG Managing Director Catherine Igathe highlighted that the youth often shun lengthy covers as such players in the industry need to introduce short term covers.

“The average age of the industry’s customers is 40 years. While the old people may want to buy house and motor vehicle covers, many youth want to insure gadgets such as phones and laptops,” Ms. Igathe said according to the local daily.

As it stands, the shared profit for the 54 insurers operating in the country has dropped to Ksh. 3.54 billion as of last year even though insurable risks are on the rise. On the other hand, insurance penetration in the country stands at a lowly 2.43 percent of the GDP which is the best among East African nations. Continentally, South Africa has the highest insurance penetration rate which stands at 17 percent of GDP followed by Namibia whose rate stands at 6.7 percent.

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