This archive report was first published on 19 September 2019.
Published on September 19, 2019, Kenyan insurance firms are shifting their focus to short-term insurance products to address the needs of the young population.
The Association of Kenya Insurers (AKI) chief executive, Mr Tom Gichuhi, emphasized the need for affordable, flexible, and short-term insurance covers.
"If we keep on insisting that our products must be annual and we are not able to come up with short-term covers that are reasonably priced, we will wake up as dinosaurs," said Mr Gichuhi in Nairobi.
Insurance penetration has dipped to 2.43 per cent, the lowest in 15 years, while the combined profit for the 54 insurers in Kenya has shrunk to Sh3.54 billion — the lowest in 12 years.
According to AIG Kenya managing director Catherine Igathe, the length of the covers has made it difficult for many young people to come on board, with the average age of the industry's customers being 40.
Ms Igathe noted that many youth want to insure gadgets such as phones and laptops, and are asking for motor vehicle covers for specific periods, such as Friday evening to Sunday evening.
Ordinarily, a vehicle worth Sh5 million, charged at the industry's average rate of four per cent, will require about Sh200,000 to be paid upfront before the cover is granted, which is expensive in an economy where 74 per cent of salaried Kenyans earn less than Sh50,000 a month.
