Resolution Insurance to offer general cover

 

PHOTO | FILE A section of Thika Road.  NATION MEDIA GROUP

By JOHN NJIRU

Resolution Health has received a certificate from the market regulator to operate as a general insurer, nine years after it entered the local market.

Now known as Resolution Insurance of Kenya, the firm has joined the mainstream underwriting field with its flagship medical covers that will target both corporate and individual consumers.

With Sh2 billion in gross written premiums, Resolution becomes the 11th largest general insurance in the country out of the 38 operating underwriters.

“When Resolution Health was born, I had a 10-year strategic plan that was to turn the firm into an insurer by next year. The rules that were set by the market regulator accelerated the conversion and we are happy,” says the firm’s founder and chief executive, Mr Peter Nduati.

In a bid to save policyholder’s interests, the Insurance Regulatory Authority (IRA) asked medical insurance providers to become fully fledged insurers or revert back to brokerage services.

According to the regulator, products by the firms were becoming increasingly risky which would increase their chances of winding up with policyholders interests.

Some of the basic requirements sought by the authority include adequate liquid paid-up share capital, identification of company shareholders and board members, and a commendable insurance name identifying them as a main-league insurer.

“It was tough to pass the IRA’s test by we finally made it. You hear of the Sh300 million paid-up minimal requirements and you think it’s just like that; no these people (IRA) go through your papers with microscopic eyes, striking out other assets and you have to go through the process again and again,” said Mr Nduati.

The insurer started operating in Kenya as a medical provider in 2003 with a capital of Sh60 million when consumers’ negative perception against insurers was at its peak because of rapid collapse of health providers.

“At that time, there were no products targeting gynaecological conditions; medical providers were anti-feminine. I introduced maternity and dental covers, which I thought the public will be delighted to have,” he said.

He had underestimated the consumer apathy against insurance industry which was at its highest then. Then known as Health Management Organisations, medical providers were being hammered out of business due to fund mismanagement.

The likes of MediPlus, Medicare and Strategies Health had painted the medical cover field as a no-gone zone to consumers. Kenyans had lost millions of shillings in premiums from the schemes.

Resolution Health started as First Benefits Limited, a backyard concept that was born when Mr Nduati was still an employee of AAR Health Services. He would come up with products and use AAR’s distribution channels to sell them.

In 2002, a financial disagreement saw the deal called off which led to his resignation from AAR. Eventually, Resolution Health South Africa agreed to partner with him which saw the birth of Resolution Health from First Benefits.

The winding up of Strategies in 2004 due to misappropriation of funds almost drove the new firm into the financial doldrums as eight privates hospitals, its only clients, recalled their businesses.

“A flurry of phone calls came to my office and all the firms had one thing in mind, they wanted me to clear everything I owed them by mid-morning. With the collapse of the third health fund provider, which was the largest in the market at that time, they could not risk further,” he said.