Nairobi, Kenya
Investment group Old Mutual Kenya (OMK) and the Kenya National Jua Kali SACCO have launched a product that aims to help Kenyans in the robust informal sector access affordable insurance services.
Heshima Mpango Poa plan was launched today in Nairobi following the signing of a partnership between Old Mutual and the National Jua Kali SACCO earlier this month to avail insurance services at the lowest possible premiums to millions of Kenyans in the informal sector.
In the deal, Old Mutual will act as the underwriter where it will administer the public issuance and distribution of securities from a corporation or other issuing body. It will work closely with the issuing body to determine the offering price of the securities, buy them from the issuer and sell them to investors via the underwriter’s distribution network.
As an underwriter, Old Mutual will focus on the low-premium service that targets every Kenyan regardless of his or her social status.
OMK Commercial Director Mr Chris Nyokangi said the new product was based on months of research and an understanding on how the Jua Kali sector operates. He said the product would not only help Old Mutual to reach millions of people in rural areas, but it would also expand the reach of other insurance products.
“The partnership we are launching today is not only an ideal platform for anchoring the rest of our innovative financial services to millions of Kenyans still not reached, it also gives Old Mutual an opportunity to show the way in bringing back low-income Kenyans still considered outside the ambits of our formal economy into the regular financial system.We are indeed glad about this development,” Mr Nyokangi said during the launch.
He described Heshima Mpango Poa as a convenient product partnership that would enhance the distribution channels of micro-insurance services geared to reach low-income Kenyans.
“As a corporate citizen, OMK is constantly undertaking research to enable us improve the quality of our products and to ensure that these products meet the demands of the population,” he stated.
The Jua Kali Cooperative Sacco’s funeral programme targets those with affordable insurance services to ease the financial burden associated with funerals. It is based on mobile phone-enabled software through which subscribers’ data would be captured.
“There are multiple factors still impeding the reach of insurance services and most of which point to a need for financial education and planning. It goes back to the knowledge that the individuals have about insurance services. That is why we are moving out of the main town centres to other rural areas,” Nyokangi said.
Speaking during the launch CEO of the Jua Kali SACCO, Dominic Muindi, said the product is driven by the need to find insurance products that fit the description of low income workers in the informal sector that are at the same time, affordable, efficient and convenient.
“We never want to see our people carrying the burden of losing loved ones and still facing the financial burden that comes with it, which is the reason why we have signed this agreement with Old Mutual as the underwriter,” Mr. Muindi said.
The product targets everyone above 18 years. The premiums are in denominations of Ksh350, which offers benefits of Ksh25, 000. The Ksh700 premium offers benefit of Ksh50, 000 while the Ksh1, 400 offers benefit for Ksh100, 000.
Charles Mutua, the CEO of Market Enterprise Innovations and Data Analytics Limited (MEIDA), the software support provider, said the software that would manage the registration process has been developed to accommodate beyond 16 million customers.
“We see the funeral expenses as an expenditure that impedes our economy. We thought we could develop products that meet the expectations of every Kenyan through accessibility and affordability,” Mr Muindi said.
Mr Nyokangi said the launch of the new product would enable the population to appreciate the value of insurance services.
“We see the Jua Kali Association as part of a much bigger distribution channel for such products,” Mr Nyokangi said.
The writer is a Communication and Journalism student, Moi University
