This archive report was first published on 26 November 2019.
Published on November 26, 2019, a FinAccess Household Survey revealed that over one-third (36%) of Kenyans are vulnerable to economic shocks, death, illness, and loss of property due to natural disasters and calamities.
Formal risk management solutions like insurance can be a potential solution, but the survey found that only 2% of Kenyans used insurance to deal with such shocks, highlighting a huge gap between risk protection needs and insurance outreach in Kenya.
Insurance penetration varies significantly among different income segments, with a high usage rate among the highest-income segment (53%) and low usage among the lower middle- and middle-income segments (16% and 28%, respectively).
These emerging consumer groups, earning between Sh20,000 and Sh55,000 per month, constitute the highest proportion of the population and drive the economy through their economic activities, but they have stayed away from insurance and rely on traditional, inadequate risk mitigation mechanisms like social networks.
Focus on these emerging consumer groups can unlock insurance potential, and a three-pronged approach is proposed to stimulate the insurance sector, including public policy interventions, tapping social networks, and expanding the insurance industry's horizons to offer attractive value propositions to emerging consumers.
