Insurance penetration is used as an indicator of the sector development within a country. FILE PHOTO | NMG
Insurance companies are known world over as financial
institutions that collect premiums and thereafter make claim payments.
But is this the perception out there in the market space?
Many
are times an insurance company will advertise its products and services
to enable them reach set targets: amongst others their strategic goals,
wealth maximisation for shareholders and the last but not least what we
may term as brand loyalty.
From the visibility angle
many are times the insurance firms will advertise the products to the
masses to ensure that their sales and activation journeys are met with
ease since it is assumed that the client is well aware of an institution
and the product that they are selling.
It is important
for these institutions to meet the demands of the clients in terms of
service offering. The perception, many a number in our country, is that
the insurance companies will only take up your premium and never pay
claims.
Though the narrative is slowly changing due to
advent of new technologies that assist in ensuring claims payment are
done in the shortest time possible, the mind-set is yet to change.
Insurance firms would need to ensure that as they portray their
brand, they also try to change the perception of the masses by having
inclusive in their branding, a promise that what was agreed upon at
inception of the insurance will be delivered upon claiming.
Today’s
client is very well protected by various instruments. In April 2014 the
Insurance Regulatory Authority(IRA) introduced the “Treating the
Customer Fairly” campaign which encompasses information on instruments
which customers can seek retribution in the event the service offering
promised is not met. Some of these instruments include Constitution of
Kenya 2010, Consumer Protection act 2012, Competition act 2012 and
Insurance act. Most of this will touch on false and misleading
representation from the insurance to the public. Currently the
penetration of insurance is at about three percent and for the insurance
sector to hit double digits in terms of penetration we would need to
change the perception of Kenyans at large in that we keep promises. The
insurance sector also needs to come up with innovative products that
offer solutions to the masses so as the uptake can increase to desirable
levels.
Insurance penetration is used as an indicator
of the sector development within a country and is calculated as the
ratio of total insurance premiums to gross domestic product in a given
year.
As per the statistics in 2018, Taiwan recorded
the highest penetration levels at 20.88percent followed by Hong-kong at
18.16percent and South Africa at 12 percent respectively. What is
witnessed from those nations whose penetration is quite high is the fact
that they offer products that fit the needs of the clients. There is
also a gradual increase in population thus also increasing the insurable
population.
From the Kenyan perspective we need to
ensure that the brands out there not only reach out and educate the
masses in the rural areas but seek to offer solutions to the different
demographics by having products that are the same but differentiated to
fit particular markets. This should be followed by a user sensitisation
through various means which could include advertisements, promotions,
billboards and other marketing tools.
The writer is CEO of Pioneer Assurance Company Limited.
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