Browsing: Washington Ndegea

This article has been prompted by a headline that appeared in one of the dailies a while back about intermediaries’ billions owed to the Kenyan insurance sector by insurance agencies, brokers and others.

While this matter is grave and cannot be taken lightly, noting that it is people’s financial ruin we are talking about, the erroneous message cannot go unchallenged and a right assuaged where need be. The article did not correctly say who owes the money. For perspective, we have three types of insurance intermediaries in this country: brokers, insurance agents and now the banks.

The over ten thousand licensed insurance agents in Kenya mainly practice insurance under a cash-and-carry basis meaning they do not get insurance coverage till they pay cash for them.

Read Also: What’s next for the insurance industry in Kenya?

Insurance brokers in Kenya, as well as insurance agencies, can negotiate terms requiring insurance coverage …

Insurance companies, as is often said, is all about paying claims and paying their service providers. If a company is not doing those topmost two, then only a winding-up can save the public from such an organisation. 

Members of the public often get free advice from our organisation on the companies to insure with and those to avoid. We do this because most insurance consumers are basically ignorant of the goings-on in the industry and getting insurance from a company that is basically insolvent is very easy.  

In the years between 2000 and 2010, several insurance companies collapsed and the joke in the industry then was on those clients who were demanding to be served even as the doors were being shut for good. But industry insiders, like yours truly, knew companies that were in the red and it was only a matter of time before they were shut down.

Insurance associations typically are not-for-profit organisations and are meant to provide members with a range of services which includes support and training as well as lobbying on their behalf. 

Other services spelt out in their mandate include giving members information about the industry such as how changes to legislation will affect their business.

They are also supposed to provide members with useful resources like information and programs to help meet industry standards, run training and education programs, organise seminars, facilitate networking events, manage mentoring programs, connect members with other businesses in the industry, arrange public relations or advertising activities to promote the industry, organise advertising campaigns to educate or persuade the public about issues relevant to the industry and also lobby on behalf to influence government policy. 

These associations offer some information and services for free although one needs to become a member and pay a fee to access their

The Marine Insurance Act Cap 390 of the Laws of Kenya defines a contract of marine cargo insurance as a document whereby the insurer undertakes to indemnify the assured, in a manner and to the extent thereby agreed, against the losses incident to any movable property other than ship including money and other valuable securities.   

Marine insurance however, does not offer any coverage in cases like loss or damage due to willful acts of negligence and misconduct, loss or damage due to delay, or loss or damage due to improper packing. Other incidents excluded from the cover are , financial default or insolvency of owners, charterers, managers, or operators of the vessel, loss or damage due to wire, strike, riot, and civil commotion, loss or damage arising from the use of nuclear fission, weapon, or any other radioactive force, one quarter of cargo in case of collision damage, damage caused

It is common knowledge that for an economy to fully develop its insurance industry must be robust and dynamic to meet all the challenges in that economy. This includes but is not limited to developing products suited for the particular economy, and developing products fast. The industry must think on its feet. 

Other factors also come into play and all these complement one another so as to achieve the overall growth target of the industry. One of the most important drivers of insurance penetration is the intermediaries comprising of agents and brokers. They are the vital link that connects the consumers of insurance products and the sellers of the same. Suffice to say that without this vital link in the industry the penetration of insurance would be minimal or negligible and the two point four three percent we boast about and the ranking of Kenya as among the top six

The Insurance penetration in Kenya fell from 2.7 per cent in 2017 to 2.4 per cent in 2018 despite an overall premium increase in the period.

While there was an increase in premiums from Kshs 210 billion (USD2.1 billion) in 2017 to US$ 2.16 million in 2018, the penetration in comparison to the Gross Domestics Product (GDP) shows that something needs to be done to keep the sector running.

According to Bima Intermediaries Association of Kenya (BIAK) Chairman Washington Ndegea, these results are a true reflection of the industry.

IRA fails to improve penetration of insurance

He said that they represent the audited figures from the various insurance companies in Kenya.

Ndegea said that this contrasts sharply with the unaudited figures and subsequent reports from the Insurance Regulatory Authority (IRA).

“Perhaps it’s time IRA left that work to AKI if they cannot publish results from audited figures,” he said in …