Kenya’s insurance market has been growing at a rapid rate in recent years. According to the Association of Kenya Insurers’ Annual Insurance Report, the market recorded a significant increase in the number of written premiums between 2012 and 2013, and a marked increase of over 16 percent in gross earnings. Despite this rapid growth and the jump in profits, there is plenty of room to grow within the industry.
British-American Investments Company (Britam) is a diversified financial services group listed on the Nairobi securities exchange, with interests stretching across East Africa. Over the years, the company has carved out a real space for itself in the Kenyan financial services industry, offering a vast array of services. “Britam’s life insurance business has become one of the key drivers of business growth in the group,” explains Stephen Wandera, the company’s Regional Director of Insurance. According to the company’s half-year results for the period ending June 2014, the insurance business recorded a 23.2 percent growth in profits, with a revenue growth of KSH 5.3bn shillings against KSH 4.3bn last year, whereas the life business accounted for KSH 3.1bn shillings, excluding KSH 1bn in pension contributions. While the numbers are impressive, this performance has been consistent over the last few years.
An evolving business
Britam offers a wide range of financial products and services in insurance, asset management, banking and property. From life, health and general insurance to pensions, unit trusts, investment planning, wealth management, offshore investments, retirement planning, discretionary portfolio management, property development and private equity. “As Britam approaches its golden jubilee in 2015, we are proud of the company’s development and achievements over the last 49 years which can aptly be described as a journey of evolution, growth and innovation,” says Wandera. “In the process of growth over the years, Britam has left an indelible mark in the insurance sector in Kenya and distinguished itself in the East Africa region.”
Close to 50 percent of the population have limited or no access to insurance, mainly due to
their diminished economic status
Britam is a strategy and innovation driven company whose mantra squarely lies in customer satisfaction offered through market driven products and services. According to Wandera “the cornerstone of Britam’s success is it’s over 1,700 financial advisers and employees who the company’s greatest brand ambassadors. The effective management of this channel has earned the company the industry’s top award for the last seven years.”
Insurance plays a vital role in Kenya’s growing economy. Unfortunately, research shows that close to 50 percent of the population have limited or no access to insurance, mainly due to their diminished economic status. As a result, loss of property, sickness, accidents and death become calamities from which most families never recover. Hence, the enormous need to develop micro insurance products to address these challenges.
While there has been a marked increase in the number of people taking up insurance in Kenya and the wider region, more still needs to be done to bring a greater amount of the population under insurance, and to mobilise savings. In 2013, insurance premiums accounted for only 3.4 percent of GDP, a modest 0.3 percent increase from 2012, but still significantly low, which is why fostering innovation is one of the key priorities for
companies like Britam.
It has invested heavily in technology and human resource development, as these are key aspects that transform the customer experience and help change perceptions about the industry. “Britam has been in the frontline of using innovation and technology to develop micro insurance products that seek to meet the ever growing needs of the market and further deepen insurance in the bottom of the pyramid,” explains Wandera. These policies, designed especially to help individuals with low-incomes to get protection against loss of property, sickness, death and accidents, are gaining ground in Kenya, where a vast proportion of the population would otherwise not have any access to insurance.
Today, there are about 19 million mobile phone users in Kenya and many of them are using smart phones. By offering insurance products through digital apps, the reliance on intermediaries is reduced and awareness of the benefits to insurance is growing, with particular reference to micro insurance products. The focus on technology has been a defining factor in the success of Britam’s micro insurance products, as it significantly reduces the costs of providing insurance to lower-income demographics.
“Micro insurance opens up insurance to a broader cross-section of the population, building awareness, and in turn increasing the customer base,” says Wandera. “In an ever-changing and competitive marketplace it is the convenience offered by technology, and an understanding of how it can be used to improve the everyday lives of Kenyans that will ultimately drive penetration.”
Last year, Britam partnered with Safaricom and Changamka to jointly launch a revolutionary and affordable micro insurance health cover meant to widen the bracket of the population with access to medical insurance. The health insurance product, known as Linda Jamii, is an affordable and comprehensive medical cover that targets the lower income bracket (see Fig. 1). “The launch of Linda Jamii is in line with Britam’s focus on the use of available technology to change the face of insurance in the region,” says Wandera.
Britam also has one of the strongest actuarial departments in the industry in Kenya that is able to provide technical knowledge in the business. The financial advisors undergo a rigorous training programme to advance their skills and abilities. With this knowledge and experience they are able to constantly engage with clients and meet their everyday needs. “Our financial advisors are supported by Britam’s countrywide distribution channels including franchise agencies to ensure that service reach every corner of the country,” says Wandera.
Local knowledge proves vital
It may not be a surprise that Britam has been successful with its innovative insurance products, given its history. The company has been in Kenya since 1965, and has grown tremendously over the past decade, cementing its position as one of the biggest financial services providers in Kenya. Having won several awards and accolades in the insurance sector, it is testament to the fact that the company has been able to cut a niche for itself, emerging as a force to reckon with in the competitive business of life insurance in Kenya.
“Last year, Britam was named the best insurance company in Kenya by Capital Finance International for its innovative micro-life insurance product that has increased insurance penetration in Kenya,” says Wandera. “The award recognised the company’s commitment to delivering innovative products and services that meet global standards, reaffirming Britam’s brand promise of ‘your journey is our journey’.” For the last eight years, Britam has won Association of Kenya Insurers (AKI) Company of the Year Award due to the performance of its life insurance agents. The awards recognise the volume and quality of business sold measured in terms of annualised premium income, number of policies sold and persistency.
Britam has been subject to an impressive growth trajectory in the last five years, thanks to its innovative approach to insurance, financial services and management strategy. As the market leader in the country’s life insurance sector, Britam’s industry expertise, coupled with its technical proficiency and local knowledge, should see the company continue to gain traction in the booming Kenyan insurance market and capitalise on what opportunities exist.
