This archive report was first published on 22 September 2019.
Published on September 22, 2019, Jubilee Insurance has submitted a proposal to the regulator, suggesting the creation of an industry-wide innovation fund to facilitate the development of new insurance products.
The proposal aims to address the low uptake of insurance products by younger customers and the decline in profits, which have resulted in many insurers operating at a loss.
According to Chief Executive Julius Kipngetich, the current insurance business model has been shunned by customers, and only innovation hubs can give the industry a lifeline.
“No insurance company is profitable enough to allocate enough money for innovation. Our suggestion is to contribute a small amount of money per policy and create a pool for innovation,” said Mr. Kipngetich.
The innovation fund would allow individual insurers to collaborate on back-end solutions, such as cloud portals, and reduce the risk of investing heavily in products that may not be successful.
Insurance Regulatory Authority manager for policy research and development Robert Kuloba welcomed the proposal, stating that the regulator is working on developing a regulatory sandbox to enable insurers and startups to test ideas and fine-tune them for market delivery.
Insurance penetration has dipped to 2.43 percent, the lowest in 15 years, while profits have plummeted to Sh3.54 billion, the lowest in 12 years, further emphasizing the need for innovation in the industry.
