Insurers need to change tactics to enjoy growth.

It wasn’t a surprise when the investors bought only 60 per cent of British-American shares in an initial public offering last month. This is in sharp contrast with the banks in Kenya that have offered their shares in IPOs and rights issue in the recent years.
Investors oversubscribed when Equity and Cooperative banks offered their shares to the public a few years ago. The same was witnessed when Kenya Commercial Bank (KCB) rights issue were offered. It can be concluded fairly that shares from banking sub-sector are more attractive to the investors.
A few reasons can be attributed to this skewed manner of investment.One, the penetration of bank in Kenya has been relatively successful. Equity and Family banks have single handedly led the way by offering products and services to the remotest place in the country as well as regionally—at a relatively affordable prices.
Two, most banks have upped their games by adopting Information and Communication Technology (ICT) in virtually all their relations with their wide clientele. This has seen made it easier for information to be relayed in a split second to the clients via their mobile phones and other state-of-art gargets.
Insurance companies have to catch up with the banks in order to enjoy massive growth like the latter. For instance they need to demystify the myth that people have regarding the indemnity issue. It is an open secret that if you were to discuss matters insurance cover with an ordinary Kenyan, you will realize that he will be wary of insuring because he has a notion that if an eventuality were to occur, the insurance company takes eon to indemnify for losses because of the rigorous procedures involved with the lawyers. This is stark reality on the ground.
Another issue is that most Kenyans associate insurance with people who are rich and they shy away from investing in insurance sub-sectoring essence this is not true and the insurance companies have to demystify this myth. This can be done by coming up with affordable products and services that that target the niche market.
They can borrow a leaf from Equity bank that transformed the banking sub-sector by reaching out to the savers who were largely ignored by the big banks a few years ago. This courage step convinced the mama mboga out there that banking is a basic need rather than privileged lifestyle. I believe that insurance companies can “copy and paste” the model that Equity Bank adopted so that they can grow in leaps and bounds.

James Mwangi Kanyi

Nairobi.