Culturally, Kenyans pursue good health from all fronts. This enables them to fend for their families, facilitate access to health services, and affirm a decent sendoff for a beloved family member.
Data recently published by the Association of Kenya Insurers(AKI) reveals a sharp rise in low premium microinsurance products by 72 percent where the highest uptake is health, last expense, personal accident, and agriculture in that order. Interestingly, microinsurance products on offer rose from 32 in 2015 to 55 in 2023 and were offered by 18 underwriters up from 11 underwriters offering microinsurance products in 2015.
High cost of health care, digitization, and enhancement of benefits offers have contributed to microinsurance uptake. Traditionally, covers only offered outpatient and inpatient services but now include maternity and specialist services.
Personal accident(PA) covers are also proving popular among motorists who have realized that motor vehicle insurance only caters for the vehicles involved in an accident and ignores the provision of medical cover in case a driver is involved in an accident. The PA cover has also been sweetened to include short-term and low-premium covers for passengers, revelers or attendees to a particular function.
The Student derivative of the personal accident cover has also come in handy for students undertaking their industrial training or attachments. The policy offers a safety net for young students exposed to potential hazards in their lines of work, for instance, CIC Insurance Group’s Student Personal Accident cover goes for as low as Ksh 500 and only a maximum of Ksh 1025 covering one in the onset of death, permanent total disability, medical expenses, and funeral expenses.
Thanks to a growing number of dairy and horticultural farmers engaged in commercial farming, specific products have been developed and rolled out seeking to incentivize higher uptake of farming as a full-time enterprise. This informs the sharp rise in agri-based insurance products, notably, livestock insurance offered per dairy cow which also incorporates the provision of free veterinary services to participating farmers.
While ‘death’ remains a taboo subject, increased motor-related accidents have attracted the attention of numerous underwriters who now offer low-priced last-expense products to the riders through their associations. During the January-September period, 3,056 lives were lost, 3,674 seriously injured and 585 suffered minor injuries in road accidents. Among the victims were motorcyclists, pinion passengers, drivers, commuters, pedestrians and cyclists.
This is aimed at helping restore the dignity of affected families by catering for full funeral expenses from morgue payments, and coffin purchases to the transportation of a beloved family member’s home. Some insurance companies have also enriched the deal with a financial stipend given to the deceased member’s family, thereby helping them to rebuild their lives.
The report shows that low-income earners have embraced microinsurance as the products enable them to manage risks related to accidents, illnesses, theft, death, fires, and natural disasters such as floods and droughts.
However, there is still room for growth in the microinsurance sector through the development of more products that speak to lowly priced risks notably targeted through self-help groups or associations.
The report notes that the larger the number of people ‘pooling’ resources together, the lower the premiums charged hence enabling more people to access the service. For instance, index-based livestock, crop-based, and flood microinsurance products are proving beneficial to policy holders in different parts of Kenya. Coopcare health insurance by CIC insurance is another example specifically designed for Cooperative members and affiliates. It offers a comprehensive group cover at fair and affordable terms.
Kenyan microinsurers have effectively tapped into a rich base of smallholder farmers, traders, manufacturers, and informal sector workers, whose livelihoods often exist on fragile economic foundations. With flexible payment terms aligned to customers’ cash flow patterns and simple documentation requirements, these products resonate strongly with these demographics.
