This archive report was first published on 21 October 2019.
On October 21, 2019, the Association of Kenya Insurers (AKI) called for a change in the law to allow instalment payments for insurance premiums, citing low insurance penetration in Kenya.
The current law requires upfront payment of premiums for any cover to be deemed effective, but AKI's Chief Executive Tom Gichuhi argued that this limits payment options for customers.
"Many people want insurance but they can't afford it," Gichuhi said. "So you either give it on credit or allow them to pay in instalments or work closely with actuaries to develop short-term covers."
AKI is pushing its members to offer covers on credit terms based on customers' debt repayment profile, which would require insurers to rely on the services of Credit Reference Bureaus (CRBs) for customers' credit ratings.
"One way of controlling debtors will be to make use of CRBs so that customers who fall back on payments are listed just like it happens with bank customers," Gichuhi said.
Kenya has three CRBs — Transunion, Metropol, and Creditinfo — licensed as aggregators of consumer credit history but mainly serve banks and saccos.
Julius Kipng'etich, CEO of Jubilee Insurance Group, welcomed the proposal, saying it would support other innovations in pulling insurance penetration from a 15-year low of 2.43 per cent.
