The Micro insurance services available in the Kenyan market have slightly grown this year though penetration is still remains low despite affordability, a report by the Association of Kenya Insurers (AKI) dubbed ‘State of Micro-Insurance in Kenya’ shows.
Micro insurance underwriters in Kenya increased in number from 11 in 2015 to 18 in 2022, implying potential for growth in subsequent years.
According to findings of a study done by IPOS on behalf of Association of Kenya Insurers (AKI), Micro insurance products available to consumers have increased both in numbers, and types.
While a few have been ‘dropped’, many of those left standing have mainly gone through restructuring and rebranding.
Despite micro insurance differing from conventional insurance in that they are more readily available, more affordable and simple, penetration is still low.
Though the industry faces a number of barriers, industry experts still believe it has potential for growth.
The ‘State of Micro-Insurance in Kenya’ report of July 2023, mentions that even with existing barriers, there are observable efforts to grow the industry though the full impact is yet to be realized.
For products that have been in the Kenya market space for long, some improvements have been done on them.
However, more recent products have not experienced any change yet.
A micro cover that started off as a last expense now includes health cover to farmers and stands out as one of those micro insurance products that have undergone enhancements.
A health product which was initially a very basic medical cover has increased in number of benefits such as maternity and specialists.
Credit life, which was previously a standalone, can now also be offered as part of other products, with optional modules covering aspects such as like Health, Property, Last expense etc. and one can wish to choose what to pay for within this policy.
“Last Expense insurance cover now includes parents, parents in laws in addition to just previous cover of nuclear family only. In the Health cover, Personal Accident, & Last Expense are the most popular micro insurance products demanded, but most have further potential for growth.” The Report says in part
AKI engaged IPSOS to conduct a study on this industry. The overall objectives of the study were to assess the current state of micro insurance in Kenya and establish strategies that would aid its growth.
This study also sought to identify factors that present growth opportunities & barriers to micro insurance expansion; Investigate untapped opportunities for collaboration with the government, NGOs, banks, mobile money providers, microfinance institutions, SACCOs, insuretechs, funeral homes, agro dealers, community based organizations, donors, & other and to assess the impact of regulatory provisions on regulating conduct & facilitating micro insurance business registration, as well as to discover why companies have not applied for micro insurance licenses.
The IPOS brief also involved gathering insights on the global state of micro insurance & trends that can be used to develop local strategies, as well as the untapped potential of utilizing digital channels & interacting with underserved low-income segments.
