The Equity Group has officially received a license to operate in insurance business with its new subsidiary dubbed Equity Life Assurance.
Equity Life Assurance Ltd now becomes the newest entrant into the Insurance market after receiving license to operate from the Insurance Regulatory Authority (IRA).
The Assurance Limited body is a fully-fledged business with separate structures and commercial arrangements in line with IRA regulations.
“We felt the need to make our contribution to the Insurance industry and we believe we can make Insurance to be understood better by the ordinary person”, Dr. James Mwangi, Group MD & CEO Equity Group
Equity Bank has been keen on protecting lives, livelihoods and wealth and are now projecting to make protection more inclusive in their operations.
“ 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 IRA Chairman Hon. Abdirahin Haithar Abdi.
With Kenya being ranked number 4 with regards to insurance penetration in Africa with investors taking an interest in the sector, its penetration in the country is estimated at just 2.4 percent.
This has been attributed to a number of factors including poor or limited product portfolio, low or no awareness of available insurance products, low-income levels among the key consuming public, perceived low rate of returns for life insurance policies, cumbersome claim settlement procedures, lack of trust of insurance players, negative perception of providers/intermediaries and expensive premiums among others.
However, the insurance industry has continued to enjoy steady growth over the years with the insurance market premiums currently being valued at approximately Ksh.235 billion.
The market, however, remains driven by the general business category with long term insurance premiums standing at Ksh.102 billion. This accounts for 43.4 per cent of the total premiums underwritten.
The license comes at a very critical time when the economy is recovering from the impact of the COVID-19 pandemic.
The premium reported by the long-term insurers in Q4 2020 amounted to Ksh.102.12 billion, a growth of 4.5 percent compared to a growth of 11.9 percent the previous year.
The depressed growth was due to the effect of COVID-19. The long-term
insurers’ asset base grew by 10.4 percent to Ksh.499.13 billion and largely composed of income generating investments of Ksh.461.88 billion.
Of the total assets, 10.5 percent (Ksh.52.59 billion) was funded through shareholders’ equity.