Insurers told to adopt digital services amid spread of coronavirus

Insurance firms have been urged to urgently digitise all operations to reduce Covid-19 challenges that have seen foot traffic to their outlets cut as Kenyans adhere to the social distancing directive to curb the spread of the virus.

A new survey shows that going digital now would put them in a better place to overcome their biggest sector challenge — low penetration.

The study jointly conducted by Institute of Insurance in Kenya, Insurance Information Bureau and Esri Eastern Africa, also advises that companies must adopt new business models as well as overhaul their products to accommodate emerging needs, especially for the youthful population, pensioners and SMEs who continue to shun the current offerings.

“To grow and remain relevant, insurance companies should be quick to transform via the adoption of new technologies, benchmark with the global best while learning from local success stories in the financial and mobile communications sectors,” said the Kenya Insurance Industry Survey 2019.

While insurance companies engage customers when an accident occurs, the report urged a review of the customer-company engagements to include product development, pricing and distribution.

A lack of engagement, it said had seen insurance penetration shrink from a high of 3.44 percent of the gross domestic product to the current 2.43 percent due to erosion of trust in insurers that continue to remain aloof to Kenyan needs.

According to the 2020 Economic Survey, the total assets of the life insurance business increased by 15.2 percent to Sh451.9 billion in 2019, while total liabilities grew by 13.9 percent to Sh399.7 billion in the same period.

The survey urged a review of the training for insurance workers to equip them with skills that will drive innovations in the industry.