Kenya is considering putting in place reforms in order to enhance the insurance penetration rate, officials said on Wednesday.
Henry Rotich, cabinet Secretary for the National Treasury, told a media briefing in Nairobi that the legal and regulatory reforms will address the issues that have contributed to the low uptake of insurance in Kenya.
“The government is committed to provide an enabling environment to ensure that the insurance sector remains competitive through a series of reforms that will tackle matters pertaining to cost of insurance, efficiency, fraudulent claims as well as corporate governance,” Rotich said during the launch of the WAICA Re subsidiary in Kenya.
WAICA Re was created by players in the insurance industry in Anglophone West Africa, namely Ghana, Liberia, Nigeria, Gambia and Sierra Leone, under the auspices of the West Africa Insurance Companies Association (WAICA) in 2011.
Rotich said that the insurance penetration rate, referenced by gross premiums as a ratio of Gross Domestic Product (GDP) remains low at 2.8 percent compared to Africa’s penetration levels of 3.5 percent.
According to the National Treasury, the local insurance market is valued at 208 billion shillings (2.08 billion U.S. dollars) with a total of 58 insurance companies currently licensed.
Rotich observed that expansion of the insurance sector could also be achieved through product development, insurance education, improved international trade as well as the entry of new players.
Rotich urged insurance players to take advantage of the emerging business opportunities such as agricultural insurance and cyber insurance.
He added that the reinsurance sector plays a critical role by helping to stabilize premium rates, reducing insurers’ insolvency risky by stabilizing loss experience, thus reducing capital costs. Enditem