Business Daily<\/a> (Nairobi)<\/p>\nPps<\/p>\n
8 December 2011<\/p>\n
\nPresident Mwai Kibaki has challenged insurance companies to improve their systems for processing claims in order to enhance trust and confidence of policyholders.<\/p>\n
President Kibaki expressed confidence that improvement in the administration of insurance claims will lead to go more people to take insurance cover.<\/p>\n
Noting that most Kenyans appreciate the importance of insuring their lives and properties, the President observed that majority of them are shy of taking insurance cover due to challenges of realizing claims when they arise.<\/p>\n
“Indeed, experience shows that settlement of claims takes too long and therefore discourages potential policyholders,” the President said.<\/p>\n
President Kibaki was speaking on Thursday at Arboretum grounds in Nairobi when he presided over the launch the ICEA-LION Insurance Group.<\/p>\n
The Head of State encouraged players in the insurance industry to increase visibility and presence by seeking new ways of doing business and developing new products and distribution methods.<\/p>\n
The President particularly stressed the need for the industry to support the micro and small enterprises by providing them with a platform for financial inclusion through relevant affordable insurance products.<\/p>\n
He commended the merger of Insurance Company of East Africa (ICEA) and the Lion of Kenya Insurance Company, saying in this era of frequent occurrence of financial shocks it is important that insurance companies are well capitalized.<\/p>\n
“Indeed, the global financial crisis has triggered a renewed focus on insurance solvency and the supervision of group activities,” the Head of State said.<\/p>\n
Like other emerging markets, President Kibaki said the insurance industry in Kenya also needs to rapidly align its supervisory standards to international best practices.<\/p>\n
Said the President: “While this is likely to create both challenges and opportunities for insurers operating in these markets, it is, nonetheless, the surest way to ensure stability and sustained growth of the sector.”<\/p>\n
Saying his Government appreciates the role the insurance sub-sector plays in supporting business and the country’s social well-being, the President expressed satisfaction that the insurance industry has continued to register impressive performance with total gross premium income increasing by 20 per cent last year.<\/p>\n
The Head of State, however, called on the insurance industry to scale up the penetration ratio which still remains at a low of 3 per cent.<\/p>\n
“Indeed, Africa as a continent accounts for only 2 per cent of global insurance premium. Of this, South Africa alone accounts for 90 per cent,” the President said.<\/p>\n
In this regard, President Kibaki urged investors to exploit the vast untapped potential of the insurance sub-sector in the country and around Africa.<\/p>\n
On its part, the President said the Government is facilitating the insurance sector to achieve its goals by creating an appropriate legal framework that will ensure efficient and effective supervision of the industry.<\/p>\n
He cited the enactment of the Insurance (Amendment) Act, 2006 which established the Insurance Regulatory Authority with the mandate of regulating, supervising and developing the insurance industry in Kenya, as one of the reforms undertaken by the Government.<\/p>\n
The President added that recent amendments to the insurance legal framework will also help to improve corporate governance, address weaknesses in risk management systems, increase competition and development of new insurance products.<\/p>\n
President Kibaki, at the same time, wished Kenyans a happy Christmas and prosperity in the coming year.<\/p>\n
Speaking during the occasion, Deputy Prime Minister and Minister for Finance Uhuru Kenyatta announced plans by the Government to review procurement rules and regulations to give tender preference to local products.<\/p>\n
The minister observed that it was only through promotion of local goods and services that a robust economy can be nurtured.<\/p>\n
To ensure stability in the financial sector, Mr. Uhuru said supervision capacity has been strengthened to address emerging challenges.<\/p>\n
Other speakers included the Chairman ICEA LION Group Mr. James Ndegwa, the Insurance Regulatory Authority (IRA) Chief Executive Officer Mr. S. Makove and the ICEA LION Chief Executive Officer Stephen Oluoch.<\/p>\n
In attendance was Internal Security Minister Prof. George Saitoti among other senior Government officials.<\/p>\n
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