Despite its growth in recent years, underinsurance remains an ongoing problem for Kenya. Its lack of penetration largely comes down to a negative view of the industry, which has led many to save through credit cooperatives instead. The scene, however, is finally starting to change, as the country’s expanding middle class increasingly opts for insurance products. Capturing the potential of this growing market is no small feat, particularly given the level of competition in the game. To do so, Britam Life Assurance places talent as the crux of its success.

Britam is a leading diversified financial services group, listed on the Nairobi Securities Exchange. The group has interests across the eastern and southern Africa regions, with operations in Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique and Malawi. Offering a wide range of financial products and services in insurance, asset management, banking and property, Britam’s range includes life, health and general insurance, and pensions. The company is also involved in unit trusts, investment planning, wealth management, offshore investments, retirement planning, discretionary portfolio management, property development and private equity.

At this decisive time, World Finance spoke with Ambrose Njuba Dabani, Britam’s CEO and Principal Officer, about the evolution of the market and how he aims to push the company further forward.

A major challenge to growth in the industry is a widely held perception that insurance agents and companies are unscrupulous fraudsters

Can you give us a brief overview of the insurance industry in Kenya?
Kenya’s insurance industry is one of the most developed and well regulated in Africa. Over the years, insurance penetration in the country has been improving steadily, supported by the growth of the middle class and increased disposable incomes.

Recently, the country’s Insurance Regulatory Authority introduced a risk-based capitalisation supervised model to protect policyholders; it requires insurance companies to hold capital commensurate with their size and risk profile. As well as boosting confidence for policyholders, this development also encourages mergers and acquisitions of smaller, mainly family-owned businesses, so they can meet the new requirements.

In 2015, insurance market penetration stood at 2.9 percent of Kenya’s GDP, of which 1.06 percent was life insurance, while non-life was at 1.87 percent. Life insurance claims in the industry increased to KES 33.1bn ($327.3m) in 2015 from KES 2.3bn ($22.7m) in 2014, with numbers expected to continue rising over the next few years.

What are some of the challenges and opportunities in Kenya’s insurance sector?
Although it continues to grow, Kenya’s insurance sector faces a number of challenges that slow down the rate of penetration. The industry is extremely competitive, and is defined by extreme price undercutting, fraud and consumer apathy. There is also the problem of having too many players in a small market.

A major challenge to growth in the industry is a widely held perception that insurance agents and companies are unscrupulous fraudsters – that they are out to steal their clients’ money. As a result, a majority of Kenyans are wary and prefer to save and invest through savings and credit cooperatives. Furthermore, insurance is also seen as a luxury expense for the majority of citizens, and so is considered a preserve of the rich.

Despite such challenges, there are numerous opportunities within the sector. Alongside the aforementioned rise of the Kenyan middle class, the country is also undertaking giant infrastructure projects, such as the construction of a standard gauge railway and the Lamu Transport Corridor, both of which provide new potential for the market. New industries, especially in the oil and gas sectors, have also provided potential new demand for the sector.

Finally, the introduction of the government’s devolution system has led to a surge in insurance penetration in previously marginalised and mainly rural areas. This will lead to greater awareness about the industry in previously untapped markets. As a result, underwriters and brokers have had to move from the traditional urban markets in big cities such as Nairobi, Mombasa and Kisumu, among others, in order to venture into previously uninsured rural regions.

How does Britam go about recruiting managing agents?
At Britam, our unit managers are charged with the responsibility of recruiting agents, which they do through a meticulous process. They start by advertising the positions in print media, on the Britam website, and on social media platforms. We also advertise in public places, such as shopping malls.

We get numerous referrals by our agents, customers and other stakeholders as well, while our unit managers are trained to judge the suitability of each individual. Once in a while, the unit managers use their instinct and skills to spot an individual who they think could be a good insurance salesperson. As this can happen anywhere, at any time, unit managers are always on the lookout for people with potential.

Why is training managing agents important?
Insurance is a business with a high employee turnover. Our focus is to retain the most successful financial advisors and nurture those with potential. All our agents are trained in leadership, and non-graduates are trained in personal development to ensure they develop the right attitude and philosophy when working.

Our agents are trained and inspired to create their own goals without contractual burdens by the company. This means agents are self-driven to excel and surpass set objectives; in return, when they excel the company handsomely rewards them.

As we encourage our agents to specialise in specific products, we offer them high-level training that can meet all the needs of a forward-looking career in insurance. The training ensures individual agents set their own personal targets, which in turn makes it easier for the company to attain overall targets. It also equips agents with the skills that will keep them at the top of their game.

How does Britam make sure managing agents meet compliance standards?
All Britam agents sign up to a code of conduct when they join the company, in addition to their individual contracts. Once this stage is complete, the company gives financial advisors a platform to run their own show. There is seamless team dynamic among the advisors, unit managers and branch managers. All the while, our appraisal system keeps evaluating progress and encouraging better performance.

All agents must adhere to the laws set by regulators, which include obtaining the licenses required to operate. They must also pass various professional examinations that are required by law. In addition, Britam has a zero-tolerance policy on corruption. Non-compliance by agents leads to the termination of their contract. Moreover, agents who do not perform are terminated, while those that need nurturing and encouragement are mentored. We give them the tools they need to become the best.

How does Britam go about maintaining the productivity standards of its managing agents?
All those in leadership positions at Britam have a role to play in mentoring agents. The financial advisors look up to the unit managers, who in turn have the branch managers as their role models. The secret to this is simple; to succeed as a salesperson, you must have a compelling vision and you must remain focused on the goal.

In 2015, Britam was named Company of the Year by the Association of Kenya Insurers (AKI), which is the ninth time Britam’s agents have received this award. As further proof of the company’s dominance in the industry, 156 out of 280 agents recognised with awards by the AKI were from Britam.

To receive such recognition, the AKI demands an agent writes business worth KES 2.4m ($23,720) annualised premium income, with a minimum of 50 policies. The efforts of our agents saw Britam realise over KES 2bn ($19.7m) of annualised premium from individual life insurance business in 2015. The AKI also requires 85 percent of the clients netted in the year are under review, while 80 percent from the previous two years must be active in paying premiums.

At Britam, we appreciate our financial advisors and the role they play in maintaining the company’s position as a market leader. Dr Benson I Wairegi, Britam Holding’s Group Managing Director, recently said: “Our financial advisors are the lifeblood of Britam, they are our foot soldiers and ambassadors. They have done more to promote the Britam brand in Kenya than any advertising campaign can ever do, and we are truly proud of them.”

What is in store for Britam’s future?
Britam aims to have between one and two million clients in the next five years – up from the current 100,000. This projection corresponds with the continued growth of the insurance industry, as more and more Kenyans embrace and appreciate the art of saving for the future.

The company also continues to invest in technology and innovative products that will further boost the customer experience going forward.