{"id":3272,"date":"2019-03-01T10:48:48","date_gmt":"2019-03-01T07:48:48","guid":{"rendered":"https:\/\/www.gakenya.com\/?p=3272"},"modified":"2021-04-11T16:39:16","modified_gmt":"2021-04-11T13:39:16","slug":"micro-insurance-insuring-the-masses","status":"publish","type":"post","link":"https:\/\/www.gainsuranceltd.com\/ug\/micro-insurance-insuring-the-masses\/","title":{"rendered":"Micro Insurance: Insurance the masses"},"content":{"rendered":"

Micro Insurance in Kenya<\/strong>
\nMicro Insurance is the packaging of insurance for the low-income earners. It factors in their income, needs and the nature of risks they face. It was introduced in Kenya in 2013.
\nLow Penetration of Micro Insurance<\/strong>
\nGenerally, the penetration of Insurance in Kenya is low and currently stands at 3.1% of the Gross Domestic Product (GDP). This has been attributed to low levels of disposable income, poor saving culture and negative perception towards insurance. Despite also Micro Insurance being introduced in 2013, only 21% of insurers remain active in Kenya today. Out of the premiums earned in 2017, also less than 1% were from micro insurance.
\nChallenges Impeding Penetration of Micro Insurance<\/strong>
\nInsurance companies can take advantage of the challenges facing micro insurance in Kenya and convert them to opportunities which will result to an improved customer experience and more people taking it up.<\/p>\n

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  1. Lack of awareness<\/strong><\/li>\n<\/ol>\n

    Lack of awareness by insurance customers is a major challenge facing micro insurance. Many are aware about insurance, in general but they don\u2019t have enough information that would help them make a purchase decision. Insurance underwriters need to invest in educating and training their consumers to increase the uptake of micro insurance products.<\/p>\n

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    1. Product bundling<\/strong><\/li>\n<\/ol>\n

      The insurance companies offering micro insurance products ought to understand the risks and needs of a group that is already vulnerable so that they can provide more solutions and \u201crelevant products\u201d.<\/p>\n

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      1. Use of Data to enhance Customer Experience<\/strong><\/li>\n<\/ol>\n

        Long time ago, getting data was a challenge, for many companies but now many of them have an organized and systematic way of collecting useful data. Insurance companies offering micro insurance products should use the data in their possession and analyze it so that they can understand their customers better and even provide more personalized services. This information should also be used to inform decisions.<\/p>\n

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        1. Distribution<\/strong><\/li>\n<\/ol>\n

          The challenge of distribution is one of the biggest issues facing insurance companies and even customers. And a key success factor for micro insurance is delivering the right product in a cost-effective manner that allows the consumers to access information and enroll easily. Many underwriters treat micro insurance products like conventional products therefore the current distribution infrastructure is not conveniently suited to drive the penetration of micro insurance.
          \nThe targeted population has limited information and they do not feel the insurance products target them. With an estimated 88 per cent penetration rate, mobile money in\u00a0Kenya<\/em>\u00a0can be a significant driver of\u00a0micro<\/em>–insurance<\/em>\u00a0penetration. The potential target market for micro insurance is in excess of 38 million people who are registered as mobile users; the over 50,000 community-based organizations registered in Kenya. The phenomenal success of mobile money products such as M-Pesa and M-Shwari points at the huge untapped market for financial products targeting low-income households and businesses.
          \nThere have been attempts in the past to leverage mobile money to introduce micro-insurance products into the Kenyan market, although these have not always succeeded. However, use of alternative distribution channels through partnerships is the key to solving the distribution challenge. Collaboration between mobile network operators (MNOs) and underwriters is inevitable. Managing these relationships is also key, especially in agreeing who really owns the customers.
          \nConclusion<\/strong>
          \nIn this digital era, there is a great potential to grow micro insurance in Kenya with the right mix of delivery channels and innovative solutions. Instead of relying on harambees to clear hospital bills, raise school fees among others, micro insurance products that are accessible by everyone would be a better and more convenient way of dealing with such challenges. Micro insurance will also improve the financial and social well-being of individuals and households, thus boosting the overall economic prosperity of the country.
          \nArticle by Nelly Tuluba
          \nImage: Courtesy<\/p>\n","protected":false},"excerpt":{"rendered":"

          Micro Insurance in Kenya Micro Insurance is the packaging of insurance for the low-income earners. It factors in their income, needs and the nature of risks they face. It was introduced in Kenya in 2013. Low Penetration of Micro Insurance Generally, the penetration of Insurance in Kenya is low and currently stands at 3.1% of […]<\/p>\n","protected":false},"author":7,"featured_media":3270,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-3272","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-group"],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n