Pioneer General Insurance and Africa-Re join AKI
Mr. Vijay Srivastava of GA Insurance, Mr. James Ngunjiri of Pacis Insurance were elected to join the General Insurance Council, while Mr. Andrew Greenwood was elected to join the Life Insurance Council during the 30th AKI Annual General Meeting (AGM) on 30th March 2017.
The meeting also saw the ratification of Pioneer General Insurance as a member of the Association while Africa Re was ratified as an associate member.
During the meeting, the AKI Chairman, Mr. Patrick Tumbo, presented a report on the performance of the Association He noted that the Association’s income grew by7.2% due to an increase in sales volumes of insurance certificates and membership subscriptions. Similarly, administrative expenses also increased by 24.1% largely driven by an increase in publicity and research activities.
On the future outlook, Mr. Tumbo noted that changes are imminent in the industry, “New regulatory changes such as Risk Based Supervision, Takaful Guidelines and the Financial Services Authority are expected to affect the landscape once they become effective.”
Insurance Awareness at 44%, survey reveals
Insurance awareness is at 44% according to a nationwide survey undertaken in the last quarter of 2016. Of those that are aware of insurance, only 11% have in-depth knowledge.
Information on insurance was mainly accessed through TV and radio. Word of mouth also emerged as an important communication channel. Word of mouth is channelled through family, friends, colleagues and social media.
The omnibus survey, carried out by SBO Research on behalf of AKI, targeted 4,500 respondents above 18 years across the country. It aimed to determine the awareness levels and identify the main sources of information on insurance.
Read the full report here
Frequently Asked Questions on Marine Insurance
1. What is Marine Cargo Insurance
Marine Cargo Insurance (MCI) is the insurance of property as it moves from place to place including the sea, air and road.
2. Why should I insure through a local insurance company?
Section 20 of the Insurance Act Cap.487 requires all imports to the country be locally insured. Further, the current practice of insuring with underwriters outside of Kenya exposes importers to serious risks of limited recourse should anything happen to their goods before arrival.
3. Who should apply for the Marine Cargo Insurance?
Application of the cover is the importers responsibility.
4. What Modes of transport does MCI cover?
Local MCI requirement covers all imports to Kenya irrespective of the mode of transport.
5. How do I apply for Marine Cargo Insurance?
As a first time user of the System, you will be required to get access credentials by contacting KenTrade www.kentrade.go.ke
- Log on to the Kenya TradeNet System on http://www.marinecargoinsurance.co.ke/index.html
- Create a Unique Consignment Reference (UCR) which is the insurance application
- The UCR is then submitted to your insurer of choice via the platform
- Once the insurer receives the UCR, they either approve or reject it.
- Once it is approved, the insurer processes it and produces the Marine Cargo Insurance Certificate. A scanned copy of the certificate is uploaded on the platform.
6. Why am I required to submit the MCI certificate on Kenya Trade Net System yet I already have a hardcopy certificate?
The MCI application through the Kenya TradeNet System is intended to allow KRA and any other Government Agencies to access the MCI certificate electronically in the course of cargo clearance. The MCI will appear in the UCR link. This eliminates the need for manual distributions of MCIs which is costly and inefficient.
7. What information is contained in the Marine Cargo Insurance Certificate?
- Details of the insurer
- Details of the Importer or clearing agent
- Policy number/certificate number, premiums and other charges including stamp duty
- Port of loading/ transshipment/discharge.
- Description of goods/imports-including marks, quantity and values.
- Authorization from the insurer
8. What happens to cargo that is already en-route to the port of destination after December 31, 2016?
The Directive is applicable to any new shipments from 1st January 2017. Considerations will be made on cargo that was already in the high seas before the deadline.
9. As an importer, do I have the option of picking my preferred insurance company?
Yes. Importers have the choice of procuring local MCI from their preferred insurer from the platform.
Mobile: 0709 950000
Directive on local marine cargo insurance takes effect
Starting 1 January 2017, all marine cargo imports must be locally insured. This is in line with Section 20 of the Insurance Act Cap.487.
The operationalisation of this section of the Insurance Act was triggered by the directive from the Cabinet Secretary, National Treasury during the budget speech in June 2016. The CS directed Kenya Revenue Authority (KRA) to work with relevant stakeholders to ensure that imports are locally insured.
AKI was involved with other industry stakeholders including the State Department for Maritime and Shipping Affairs, Kenya Trade Network Agency (KenTrade), KRA and Intergovernmental Standing Committee on Shipping (ISCOS) to implement the directive.
Importers can now make online application for Marine Cargo Insurance (MCI) via a portal on the Kenya TradeNet System operated by KenTrade.
AKI in partnership with KRA, KenTrade and Shippers Council of Kenya have been and will continue training stakeholders even as they work towards creating an integrated platform that shall offer importers opportunity to conveniently buy marine cargo certificate and also settle claims online.
Insurance Gross Premiums hit 173billion
AKI has today released the industry statistics for the year ended 31st December 2015. The report shows that non-Life insurance continues to contribute more to the insurance premiums basket compared to life insurance at 64.4% and 35.6% respectively. The insurance industry penetration remains low at 2.97%.
Deposit Administration/Pension, Aviation, Motor Private and Medical Insurances recorded the highest premium growth. On the other hand, Group Life, Investment/Unit linked Contracts, Theft, WIBA and Marine had the least premium growth.
Overall, the Industry grew by 10.05% in 2015 compared to a 20.3% growth in 2014 representing a 9.8% decrease. Contrastingly, the industry recorded positive growth in Gross Premiums of ksh173.89billion in 2015 compared to Ksh157.21billion in 2014.
This significant drop in percentage growth in 2015 has been attributed to the substantial drop in group life growth to record 8.58% compared to 2014 where it grew by 29.4%. The spike in 2014 has been attributed to the Governments uptake of group life insurance for civil servants and other public officers.
Mr. Hassan Bashir, AKI Deputy Chairman, while reading remarks on behalf of the AKI Chairman, Mr. Patrick Tumbo, noted that the insurance industry as part of the wider financial sector is facing more scrutiny from regulatory bodies which have led to several statutory changes, “There were some significant changes in statutory requirements including the risk based supervision…the regulations are set to take effect in a phased implementation concluding in 2018.”
In his remarks, he also noted the contribution that the Government had made in 2015, and is continuing to make in 2016, to the insurance industry through its Agriculture insurance premium subsidy initiative. He further lauded the Government’s drive to implement Section 20 of the Insurance Act that will direct Marine Cargo Insurance to local players, a business estimated at ksh20billion.
AKI, DMI partner to hold medical camp in Naivasha
AKI has today presented the Kenya Diabetes Management and Information Centre (DMI) with a sponsorship cheque worth Ksh1.4million to hold a medical camp on Saturday 6th August 2016 at Karagita Informal Settlement in Naivasha.
The medical camp aims to attend to general ailments, diabetes and hypertension cases, eye infections and cataracts, dental and dental fillings, cervical, prostate and breast cancer screening, family planning, VCT and deworming for all.
Speaking during the cheque handover ceremony, Mr. Hassan Bashir, AKI Deputy Chairman and CEO of Takaful Africa Insurance, noted that there is great need for medical attention and treatment across the country and as an industry, the medical camp is a way of providing some of the medical help to those in great need.
The AKI Executive Director, Mr. Tom Gichuhi noted that the partnership with DMI is in its 6th year having started in 2011 in Makuyu, Murang’a County. “Over the years we have been to Isinya in 2012, Machakos in 2013, Kiambu in 2014 and in Mwea in 2015,” added Mr. Gichuhi.
The 2016 AKI Medical camp has been supported by 11 members; APA Insurance, CIC Group, Heritage Insurance, ICEA LION Group, Jubilee Insurance, Kenindia Assurance, Liberty Life Assurance, Madison Insurance, Occidental Insurance, UAP-Old Mutual Group, Britam Insurance and Directline Assurance.
Next generation customer
Today’s customer is tech-savvy, more informed, more demanding and more discerning. Businesses therefore have to meet increased customer service demands to remain and grow in business.
KPMG on 23 June 2016 released a survey titled ‘Next Generation Customer’. The survey identified customer experience as the new battleground for many insurance companies. It notes that many companies view customer service programmes as a cost rather than a way to build value. Many companies therefore, lack agile, responsive customer relationship mechanisms to match their growth ambitions.
In particular, the survey looks at understanding the customer, managing the customer and leveraging on technology to provide better customer experience in the insurance sector. The survey was undertaken in Kenya and respondents were drawn from insurers, brokers and agents.
Read the full report here
Fire and Engineering Skills Upgrade Training in Kisumu
The Property and Engineering Committee carried out a skills upgrade training on property and engineering. The training was held at Imperial Hotel, Kisumu from 15th to 17th June 2016.
The training targeted middle-level officers in branches around Rift Valley Western and Nyanza regions. The main area of focus which was fire material damage and loss of profits also covered the underwriting and claims documentation and the claims processes.
A similar training will be held for branches in the central and eastern regions. Nairobi and Mombasa regions were trained in 2015.
World Bank, AIO and ILO facilitate international Agriculture Insurance Workshop
The World Bank, Africa Insurance Organization (AIO) and the International Labour Organisation (ILO) sponsored a three-day workshop on Agriculture Insurance in Kenya from 8th to 10th June 2016.
The workshop brought together 54 representatives from the Kenyan government, players in the insurance market from various African countries and private sector entities actively involved in the development of agriculture sector in Sub-Saharan Africa.
The interactive workshop, which also included a one-day field visit, provided valuable opportunity to participants to share experiences and learn more about Normalised Difference Vegetation Index (NVDI), Area Yield products and other innovations in the field of index insurance.
Agriculture is a key pillar in the Kenyan economy it accounts for 27% of the GDP and over 60 per cent of total foreign exchange earnings. The sector provides 80 per cent of all employment opportunities in the country and also ensures reliable food supply. However, agriculture insurance uptake does not reflect this potential.
The workshop was organized to address some of the challenges that face Agriculture Insurance including lack of specialised technical experts, inability of farmers to pay premiums, lack of public awareness, moral hazards, lack of affordable reinsurance support, inappropriate distribution channels among others.
AKI is also undertaking other initiatives to improve uptake of Agriculture insurance this includes a survey to determine the agriculture insurance landscape in the country. Findings from the survey will provide insights into the situation which will determine the strategies to grow the penetration of agriculture insurance.
AKI takes part in the inaugural Chamas and SACCOs investment summit
The inaugural Chamas and SACCOs investment summit was held on 30th and 31st May 2016. The Summit, organised by AITEC Africa, brought together over 370 participants from various chamas, SACCOs and other such groups with the aim of sharing information on other non-traditional ways of diversifying their investment portfolios. Currently, most Chamas and SACCOs specialise in saving money in the bank and purchasing land.
Themed, ‘Unlocking the economic power of investment groups’ the Summit was organised into plenary sessions and workshops focusing on various topics. There was also an exhibition area where several organizations showcased their products and services. Four AKI Members, Jubilee, Liberty Life, Resolution and Pioneer Assurance took part in the exhibition.
AKI took part in the first panel session dubbed ‘Assessing the role of Diversity in Investment Portfolios’. AKI Executive Director, Mr Tom Gichuhi, challenged participants to leverage on insurance to invest, protect their investments, and at the same time enhance the welfare of their members. In particular, he pointed out various products that chamas and SACCOs can take advantage of including unit trusts for investments, Group medical insurance, group life and last expense covers, as well as credit life for protection from defaulters. In addition, he also pointed out that SACCOS and Chamas could also sell other insurance products on behalf of insurance companies. They would act not as agents but as aggregators given their access to large numbers of people. The Chamas and SACCOs would then earn a commission on the insurance covers they have sold therefore generating another income stream.
AKI holds Life and Pensions Managers Forums
AKI held various forums with group life, individual life and pensions managers in the months of May and June 2016.
The Forums, undertaken each quarter, address arising issues in the industry. In particular, the forums addressed issues on co-insurance, Financial Services Authority Bill, strategy to achieve 1million individual life policies by 2017, Market Conduct framework, AKI Agents of the Year Award (AAYA) revised criteria, findings from an SME market research as well as strategies to grow the life and pensions businesses.
AKI undertakes industry capacity building
As part of its strategic initiatives to grow the insurance industry in the country and to maximize value to its members, AKI continuously undertakes various industry capacity building initiatives.
In April 2016, AKI undertook a Life Skills Upgrade training with the aim of equipping young underwriters with practical skills and knowledge in life insurance business. The training covered relevant topics including: best practice guidelines in underwriting, Claims handling procedure and management in group life, the reinsurance process, understanding the role of actuaries in life business, opportunities for growth of group life business in the SME sector, outstanding customer service in group life business and personal effectiveness (attitude, time and stress management).
To ensure that Life Business Sales leaders achieve a high-performance team culture, AKI undertook training for Life/Unit Managers in May 2016 at the College of Insurance. The training, facilitated by Mr. Deon Van Greunen from the Network of Training, South Africa, focused on fundamentals of teams, leadership and relationships. The second edition of this highly rated training will be undertaken in September 2016.