Equity Group has diversified to insurance business with the launch of Equity Life Assurance Kenya Ltd (ELAK).
ELAK is fully owned by Equity Group Insurance Holdings Limited (EGIHL), a subsidiary of the Group.
This is part of Equity Group's vision to expand its revenue stream.
Group CEO and Managing Director James Mwangi said ELAK is a fully-fledged business with separate structures and commercial arrangements in line with the Insurance Regulatory Authority (IRA Kenya) regulations.
Dr Mwangi said ELAK will ensure that the insurance solutions are easily accessible using technology thus giving Kenyans the freedom to access, pay and receive the insurance solutions of their choice.
“The ELAK licence comes at a very critical time when the economy is recovering from the impact of the Covid-19 pandemic. Our inspiration is to offer insurance to all categories of consumers and make insurance accessible, affordable and inclusive in line with our purpose of transforming lives, giving dignity and expanding opportunities for wealth creation,” said Dr Mwangi.
Covid-19 has been the greatest set back to many households in their pursuit for economic independence.
ELAK is pledging to invest heavily on consumer education to equip Kenyans with knowledge to make the right decisions regarding insurance for themselves and their businesses, and to embrace insurance as a key component to reliably grow their wealth, health, and livelihoods by protecting it.
Angela Okinda, the managing director and principal officer of ELAK, said their aim is to provide consumers with freedom and ease of access to insurance solutions, payment and placement of their insurance coverage, as well as support and advice during the life of the policy.
“ELAK will also ensure easy access to insurance solutions through multiple distribution channels. ELAK’s provision of insurance will be refreshingly different, innovative and very convenient,” Ms Okinda said as she received the licence from the IRA in Nairobi.
Also speaking while handing over the licence, IRA Chairman Abdirahin Haithar Abdi expressed optimism that ELAK would play key role in the sector considering its past business history noting that Equity group has instilled confidence to many Kenyans.
“The insurance business relies heavily on trust and Equity has a well-defined history and support from the public, which is a key aspect for success in the sector,” said Mr Abdi.
Kenya is ranked number 4 with regards to insurance penetration in Africa and many investors have taken an interest in the sector.
The insurance industry in Kenya is characterised by low penetration levels, currently estimated at 2.4 percent, which is attributed to a number of factors including poor or limited product portfolio, low or no awareness on available insurance products, and low income levels.
Low rates of returns for life insurance policies, cumbersome claim settlement procedures, lack of trust of insurance players, negative perception of providers or intermediaries, and expensive premiums, among others, also impede the sector’s growth.
However, the insurance industry has continued to enjoy steady growth over the years with the market premiums currently being valued at approximately $2.35 billion.
But it is mainly driven by the general business category with long-term insurance premiums standing at $1.02 billion, which accounts for 43.4 percent of the total premiums underwritten.