Kenyans can now access insurance services through banks after the first Bancassurance conference to be held in Kenya launched a new model dubbed Bank Insurance Model (BIM) that will move all insurance services in the country to the lenders.
Bancassurance, an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank’s client base, is a new concept in Kenya but has been a major hit in developed countries.
Speaking during the launch, the Insurance Regulatory Authority (IRA) CEO Mr Sammy Makove said that both the BIM and the Traditional Insurance Model (TIM), will run parallel to maximise the potential of the insurance service acquisition to Kenyans while maintaining acquisition costs at manageable levels. “As we grow, the proposition of inclusiveness should be put in place to cover more Kenyans living outside the insurance bracket. Alternative distribution models should be applied on top of the traditional methods,” said Mr Makove.
The conference, themed “Increasing penetration by enhancing Bancassurance: focus on optimizing Bancassurance models and Micro Insurance,” brought together insurance experts from within and outside the country to discuss the future of Bancassurance in Kenya and focused on Bancassurance and micro insurance amongst other business development areas. Mr Makove also mentioned that the government is in talks with the Central Bank of Kenya (CBK) to allow the 35,000 banking agencies under its control to distribute insurance services.
“However, the new practice should put into consideration the customer values and interest,” he warned. Experts observe that the move is a stepping-stone to new levels for the lending and insurance institutions and even more to Kenyans. “Bancassurance has seen success in the developed world, this new trend will deepen the roots of banking and insurance industries in Kenya,” Isaac Ng’aru, a Risk Consultant observed.
In some countries, bank insurance is still largely prohibited, while in other countries like USA Bancassurance offers mortgage insurance, life insurance or property insurance related to loans.
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