Kenya: Let Banks Sell Insurance, Jubilee Urges

Nairobi — The Government should allow commercial banks to sell insurance products since agents and brokers have failed to make an impact, Jubilee Insurance has said.

Mr Nizar Juma, Jubilee Holdings chairman, asked Finance minister Uhuru Kenyatta on Thursday to legalise the sale of insurance products under what is known as bancassurance.

He said the low uptake of cover among Kenyans has partly been a result of using limited channels to sell insurance products, since the industry has been relying heavily on agents and brokers who have failed to achieve significant penetration of insurance.

The chairman said banks are a good channel of selling the products because they have a good reputation and are thus more trusted. Banks also have vast customer databases as opposed to insurance companies, which makes it easy for them to reach more people by way of cross-selling bank products and insurance products, he said.

Mr Juma also asked the government to find ways of funding third party insurance claims emanating from matatus, in a move to make PSV insurance viable. He gave South Africa as one of the countries where governments pay for third party claims from public service vehicles.

South Africa allocates a percentage of the money from petrol into the Road Accidents Fund, which goes towards compensating third parties in accidents.

Jubilee Insurance chief executive, Patrick Tumbo, said most matatu insurers have collapsed because of ambulance chasers and false claims, but if the government takes responsibility for third party claims, there would be order and more insurance companies would be willing to insure matatus.

The two were speaking to reporters in Nairobi after attending the company's annual general meeting.

The meeting approved payment of one bonus share for every 10 shares held, but the decision must await permission from Capital Markets Authority and Nairobi Stock Exchange.

The meeting also anonymously voted to increase the insurer's authorised share capital from the current Sh247.5 million to Sh350 million.