Kenya Insurance Report Q4 2012

The Kenya Insurance Report considers the prospects for both life and non-life insurers in the country. Asof late 2012, we remain of the view that Kenya’s insurance sector is dynamic and resilient. Premiums inboth major segments are about 20% higher than they were in 2011. Although the insurance companies aresmall organisations by most standards, they are innovative and clearly understand the needs andchallenges of their customers. Initiatives that have been announced in recent months include agriculturalrisk products that cover farmers against the impact of natural disaster, facilities to pay premiums and viamobile phones and takaful. Another indicator of the potential for the non-life segment is that Kenya is oneof only four countries in Africa (the others being South Africa, Egypt and Uganda) in which globalproperty and casualty insurance giant Chartis has an on-the-ground presence. Non-life penetrationexceeds 2%, which is a high level for a country with Kenya’s income per capita.

In a country where many households are too poor to consider saving for the future, Kenya’s life insurershave still managed to develop a segment that accounts for about a third of all premiums written in theinsurance sector as a whole. In other words, they have collectively built sufficient trust among thoseKenyans who can save for the long term. Given the country’s tendency for high(ish) inflation, this is verymuch to their credit. Unlike some Eastern European countries, the development of the segment has notbeen driven entirely by multinational giants. South Africa’s Metropolitan Life has a subsidiary in Kenya.

Sanlam, another South African major, owns half of Pan Africa. Liberty and Old Mutual are alsopresent. However, local life companies have also been key players in the segment’s evolution. Lifedensity is low by many standards but is clearly growing rapidly.We remain optimistic about the prospects for Kenya’s insurance sector, and this is reflected in ourprojections through to 2016.

Over the last quarter, BMI has made the following changes:

The analysis incorporates BMI’s latest forecasts for Kenya’s economy, including details inrelation to auto sales and trends in the healthcare sector.

The analysis incorporates the latest comments on developments from the leading insurers.