Financial provider Kenya Commercial Bank (KCB) has announced it is venturing into the country’s insurance sector.
KCB unveiled its plans on Wednesday stating that its insurance agency will help tap into the country’s largely unexploited market. Through the use of inventive channels, the lender will be focusing on expanding the country’s life insurance and pension business.
“So far, the bank has successfully rolled out a five year strategic plan that has helped KCB consolidate its position towards realization of its goals of being the preferred financial services provider,” KCB Group CEO Joshua Oigara said.
“This bancassurance proposition fits within KCB’s game plan to boost investment in new business lines, revving up growth in its subsidiaries and expanding its foray in the cashlite economy.”
During the launch of the lender’s insurance agency it was underlined that the insurance sector still lags behind with a penetration of a mere 3.4 per cent.
Winnie Mbugua, head of bancassurance KCB Group said, “In a country like Kenya where penetration is low there is a mismatch of priorities because we are creating wealth faster than mechanisms of protecting this wealth. For a majority of Kenyans more than 90 per cent are not insured.”
“Over the last two year we have seen the changing insurance landscape we have seen new entrants and movement of capital by big underwriters who have interest in joining the Kenyan market,” Sammy Makove, CEO at Insurance Regulatory Authority said.
According to the latest data from the Kenya’s Insurance Regulatory Authority (IRA) firms from the sector made a total underwriting loss of 480.2 million Kenyan shillings. Nonetheless, premiums in Kenya have been growing by double digits.
KCB is also hoping to that its insurance agency will boost its earnings going forward.
In the beginning of the year, the lender announced that it had posted a 17.5 per cent rise in its profit after tax for its full year results. Buoyed by growth in the group’s balance sheet and non-funded income, the lender profit after tax stood at 16.8 billion Kenyan shillings for the year ended 2014 compared to 14.3 billion Kenyan shillings in a similar period in 2013.