Britam Taps On Low Income Earners To Grow Uptake Of Insurance Products In Kenya

NAIROBI,Kenya, Feb, 21 – Listed insurer Britam Holdings says it is changing tact to focus on low income earners, even as it marks paying Sh3 billion in health and life insurance claims to under-insured customers since 2015. 

The company’s Emerging Consumer Business Director Saurabh Sharma said many Kenyans, especially smallholder farmers and small businesses, could not afford insurance covers currently offered in the Kenyan market.

Low income earners, Sharma noted, continued to be the ones that are largely affected by risk events including hospital admissions, loss of a loved one, or business interruptions such as fires and theft.

Quoting the Finaccess household survey report by the Central Bank of Kenya, Sharma said that for the lower income segments, insurance penetration is one third of what it is in the higher income segment.

“This clearly shows the huge protection gap. These are the communities that need insurance more than others,” Sharma said. 

Unlike the low income earners, high income earners especially those in formal employment are covered by their employers against major risks, in particular hospital admissions.

According to the expert, the low penetration of insurance uptake can be pegged on various reasons, including too much focus on high net worth individuals and lack of understanding on how insurance works. 

“On the supply side, most insurance companies focus on offering their products on corporate clients and those with money. On the demand side, many Kenyans do not understand how insurance works, so they do not trust them.”

Britam is now offering simple and easy to use products to capture a market that has largely been ignored.

Through their Emerging Customers Business, the company is now focusing on meeting the needs of a large segment of Kenyans who have been ignored by insurance companies.

“The Emerging Customers Business is a business on its own through which we solely focus on the everyday Kenyan, not the high net worth Kenyans,” he said.

To implement the new strategy, Britam said it has adopted a two prompt strategy to make the purchase of insurance simple. Sharma said that through the strategy, they have introduced simple products that have minimum terms and conditions.

Sharma said they have been working with like-minded partners who can reach more people. 

“We are working with telecommunications companies, ride-hailing companies and e-commerce companies to reach more people,” he said.

For instance, the company is working with farmers’ associations to reach smallholder farmers in the country. Its other key partners include health financing technology firm M-Tiba and ride hailing app Little.

“With the ride hailing apps for instance, we are working together to promote insurance services that are as low as Sh5 of Sh10 per day,” Sharma said, adding that they had already sold one million policies, effectively covering the policy holders and their families.

Sharma said the model was working, adding that Britam has paid more than Sh400 million in claims on an average every year to the most vulnerable customer groups such as low income families and small businesses.