Nairobi Securities Exchange listed financial services group Sanlam Kenya is banking on revamped marketing and sales efforts to capture a bigger market share of the country’s untapped existing customer base.
Speaking at the firm’s Annual General Meeting (AGM) and in a statement published in the company’s Annual Report and Financial Statements 2017, Sanlam Kenya Group Chairman Dr John Simba said the insurer will focus its strategy on capturing new market segments with disposable incomes and rising need for insurance.
“Insurance is a measure of economic growth since, as people’s income grows, the more they see a need for insurance products,” said Dr Simba.
“Over the years, one of the challenges we have faced as a country is low insurance penetration across the board. In low insurance penetration lies opportunity,” said Dr Simba.
While in Kenya, insurance penetration is below 3%, it is estimated at 13% in South Africa.
Dr Simba said through a sustained education campaign stressing the values and benefits of insurance, the Kenyan insurance industry can enjoy sustained growth.
He noted that the slowed economic growth recorded in the year affected the insurance industry which registered a 6.6% growth in premiums during the year compared to an annual growth of 12.3% in 2016.
The subdued growth was largely driven by accelerated growth in the life insurance segment which grew by 13.6% compared to the general insurance segment that only grew by 2.5%.
Overall premiums are however still largely skewed towards general insurance which accounted for 60 per cent of the Ksh 207.7 billion of premiums collected for the year ended December 31, 2017.
According to Sanlam Kenya acting group CEO George Kuria, Sanlam Kenya’s strategy is to make its products more relevant to the market in addition to filing in any existing gaps.
“In terms of re-engineering the business model, we now have working teams spread across our businesses who are exploring new business opportunities, refocusing on building partnerships and developing innovative ideas to grow our business,” said Kuria.
“Insurance products are really the same at the core; the differentiator lies in how you package them. We are therefore paying more emphasis on how we deliver our products to our clients.”
Sanlam’s general insurance business revenue grew by 115% over the previous year.
The general insurance business posted revenue of Ksh 2.1 billion against Ksh 1 billion in 2016 with the business turning to profitability for the first time since Sanlam acquired it three years ago.
Sanlam Kenya’s life business declined marginally by 2% to post premiums of Ksh 4.3 billion from Ksh 4.4 billion in 2016 while shareholders’ funds grew to Ksh 2.4 billion from Ksh 2 billion the previous year.
“To further grow the business, we have refocused our attention on the retail life business to ensure that it is properly structured so that we can deliver quality products to our clients to ensure long term sustainability,” said Kuria.
Sanlam Kenya last year reviewed its life insurance structure and refreshed its education, retrenchment and last expense products.
In its general insurance business segment, the insurer brought to the market travel and marine insurance products. The firm has also been undertaking partnership development programmes which involve training solutions for its stakeholders to enable them provide exceptional service delivery.
“One of the things we are doing is strengthening the back end, such as adequately staffing the call centre and undertaking partner training to make sure we respond to customers efficiently,” said Kuria.
“We are also looking at creating self-service portals for our clients and sales people so that they are able to transact and respond quickly to customers. We continue to strengthen the partnerships that we have, by continuously scouting for likeminded organisations we can partner with to give the customers products that are relevant.”
The insurer, Kuria said is also looking at cross selling among its businesses, on the various business units under the Sanlam umbrella.
“We have a wide customer base in our life business who are not necessarily our customers in general insurance and vice versa. The holy grail lies in integrating the entire business and tapping into our existing network. This presents a huge opportunity for us,” said Kuria.