The Association of Kenya Insurance (AKI) estimates that by the year 2020 local insurance companies will look to increase insurance penetration to be in line with the global average of 6%.
Currently, Kenya’s insurance penetration stands at 2.75%, but the AKI is hopeful that local insurance players will work to increase penetration to 6% by 2020, with 6% being the global average in 2016.
This is according to a report in the Star, an online Kenyan publication, which cites that AKI Chairman, Patrick Tumbo, said; “We aim to reach the 6 per cent penetration level by 2020 by taking on the numerous untapped opportunities that exist for insurance business in areas such as oil and gas, real estate, infrastructure, bancassurance, micro insurance and agriculture.”
Growth in insurance penetration would present an opportunity for greater reinsurance participation in the region, as local players would require greater financial and perhaps technical support as they expand their premium base.
Gross written premiums (GWP) across the Kenya insurance sector increased by more than 13% in 2016, with more growth occurring in the non-life sector than the life space.
The Kenyan insurance company also recorded greater profit in 2016 when compared with the previous year, increasing by almost 23% year-on-year. This is compared with a 19.15% dip in profit in the previous year, explains the report.
Low insurance penetration occurs in many parts of the world and in both mature and emerging markets, and for a range of risks. In places like Kenya it can be that awareness and education around insurance solutions is serious lacking, which, if improved could lead to higher rates of insurance penetration, ultimately better protecting societies and individuals against a range of natural and non-natural catastrophe risks.
