AIBK decries low demand for cover against risks related to elections
Demand for insurance cover against politically motivated risks is very low in Kenya as majority of people are yet to appreciate its importance.
Association of Insurance Brokers of Kenya (AIBK) Mr. Nelson Omolo blamed the slow uptake of political risk cover on lack of awareness of the insurance products accessible in the market.
“There are fewer inquiries about political risk policies and this could be due to not understanding or ignoring the importance of such a cover,” said Mr. Omolo.
Mr. Omolo was speaking today at the 12th annual regional AIBK conference at Diani, Kwale County whose theme is “Harnessing the Future of Insurance: The Crystal Ball Focus.”
He stressed the need to educate the public on the need to take cover against risks associated with political violence like the one witnessed in the country recently after the August 8 and October elections.
Scores of people died and property of unknown value destroyed while businesses suffered during protests which rocked some parts of the country.
Mr. Omolo said political violence risk products have been rolled out and that what is required is to intensify campaigns to tap into what up till now has been a slow market.
At the same time, the chairman faulted insurers for awarding tenders exclusively to underwriters at the expense of brokerage firms saying they too should be considered since they have the capacity to deliver.
“Let us also think of the reasoning behind advertisements of underwriters’ only tenders which are gaining currency by the day,” he said claiming the process encouraged corruption.
He called on the Insurance Regulatory Authority to intervene and help restore sanity in the tender business.
He said, as intermediaries, they welcomed healthy competition where distinction is based on service adding that price wars amongst their members need to be eliminated.
He noted that such wars had turned brokers and underwriters into a laughing stock and should stop.
In a bid to match the world’s average, local insurers hope to increase penetration to six per cent from three per cent by the year 2020, said Mr. Omolo.
This will be done through regional collaboration and tapping into additional opportunities for insurance business in areas such as micro insurance, oil and gas, real estate, terrorism, political risks, and agriculture.
IRA acting CEO Mr. Godfrey Kiptum said the Kenyan insurance sector is currently ranked fourth in Africa and that there is hope of doubling premiums largely from the micro insurance segment.
By James Muchai