How to get more Kenyans insured

At the September Fail Up event at the Nailab the guest speaker was Peter Nduati, the CEO of Resolution Group. He shared his remarkable journey as an entrepreneur. It was a great event, full of valuable insight.
When Mr. Nduati was in employment, way before he started Resolution, he used to ask his fellow managers why the company did things in a certain way. For instance, why they didn’t offer dental or optical cover. Or why no insurance company covered gynecological issues. Or why once a patient was diagnosed with a terminal illness, the company would terminate the cover.
The response he got was, “that’s how we have always done things.” He identified a gap in the market and with this in mind, he began Resolution Health. It was quite a disruption at the time.
As he concluded his talk at the Nailab, he was asked what keeps him up at night. His response was the thought of a young man/woman coming along and doing exactly what he did those many years ago.
Insurance penetration stands at 2.9% of GDP after the recalculation as Kenya became a lower middle income economy. With such a low percentage of the population insured, we do need a disruption in the industry. Not that there haven’t been concerted efforts by industry players. Bancassurance and mobile insurance are the most notable distribution models.

Sema Doc by Safaricom and CBA underwritten by Canon Insurance is one. Pan Africa Life has a mobile solution with Airtel where as part of its loyalty program, the subscriber gets insurance cover depending on airtime usage. AAR has a product that has a 50% cash back reward in the event the policyholder does not utilise their outpatient limit after a period of three years. However, Britam discontinued individual sales for Linda Jamii, a mobile medical insurance solution. A product it had developed with Safaricom. The individual sales margins were not sustainable.
But maybe the problem isn’t the medium used to access the product. Maybe it’s the product itself. The Kenyan culture is marked by a sense of community and philanthropy. From Kenyans 4 Kenya to A milli for Jadudiwe celebrate coming together to help others in times of crisis. Harambees (crowd source funding) and fund raisers are done for weddings, school fees, health issues, funerals among other needs. So as a participant in these philanthropic activities, you assume that when you’re in need, people will rally around you to assist financially.

I would argue that African societies had insurance in their DNA, even before the term was coined. Your premium is your contribution to friends and family when they are in need. Then, your claim is paid out immediately you’re in need, without the bureaucracy of claim investigations. Now, this system only works in instances of dire need (except for weddings) where it may be a matter of life and death. This coupled with our faith that God will rescue us in any and all disasters makes for a formidable challenge.

That said, I see an opportunity here. The next most profitable target market is the millennial. Find ways to reach this market, and you’ll be laughing all the way to the bank. Mr. Peter Nduati did not divulge too much on future plans, but on his part said, Resolution Group was looking into this with his research & development team. I, personally, can’t wait to see another real disruption in this market.