Kenya’s insurance sector is the fastest growing in Africa
Kenya’s insurance market will grow two fold in the next two years according to assurance, tax and transaction advisors Ernst and Young (EY). The fastest growing sector in Africa was reported to be Kenya’s insurance sector, which generated insurance premiums to the value of approximately $1.8 billion in 2014 (the largest in sub-Saharan Africa outside of South Africa). Oxford Economics estimated that the Kenyan insurance sector would experience a growth of $2.2 billion by 2018.
Organic growth in Kenya’s insurance sector
Kenya has been doing significantly well in the insurance sector owing to foreign investors as well as the expansion of insurance companies into Kenya such as:
Saham Finances (Saham Group)
Liberty Life Assurance
Prudential Life Assurance
The presence of these companies are expected to not only enhance Kenya’s insurance sector’s stability (through injection of core capital into the industry) but also technical insurance expertise and innovation, especially in product development and distribution.
With foreign investors swarming to Kenya to take advantage of the subsequent attractive opportunities presented by the booming insurance sector, EY has reported that the Kenyan insurance sector would predominantly be driven by organic growth.
Mergers in Kenya’s Insurance sector
The Kenyan insurance market has also seen mergers and acquisitions and other restructuring including:
Real Insurance Company which was acquired by British-American Investments Company Limited
Pan Africa insurance bought 51% stake of Gateway Insurance.
Britam Holdings acquiring Real Insurance
Metropolitan Group acquiring Cannon Assurance
Old Mutual Group acquiring UAP Holdings and
These acquisitions represent an opportunity for innovation and creating synergies which could further enhance long-term revenue growth and profitability for Kenya’s insurance sector.
What’s next for Kenya’s insurance sector?
EY has stated that Kenya’s insurance sector may witness change in distribution channels from agents and brokers to mobile phones, direct channels and bankassurance, particularly over the next 3 years. [Read more]
It looks like we can expect a revolution that sees increased financial penetration in the country.
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