“The concept of our company is to try to solve the challenges that has been facing the (insurance) industry for a very long time” Mr Joseph Njoroge, CEO of Ensign Insurance Brokers is looking somber as he tells Business Today this pioneering, perhaps revolutionary, piece of news. “Remember, the penetration of insurance in Kenya is still very low, at less than 5 %.”
Indeed, only 8.5%, or one out of every 12 Kenyans, are insured – with just double that woeful figure with the National Hospital Insurance Fund (NHIF) – yet poor health and subsequent costs is the single factor that plunges the average Kenyan into poverty, and the middle class family into debilitating debt.
“The issue here is unlike the banking industry which has transformed and evolved over the years,” Ms Vicky Mwiti, the General Manager of Ensign, says. “The insurance industry is still stuck in the old traditional ways. There’s need by the industry players to make insurance as simple as possible, not an art of the puzzle, so the uninsured masses can feel that they are part-and-parcel of it.”
Ensign CEO Joseph Njoroge says they are introducing into the market a virtual insurance company model. “Look at the requirements for registering an insurance company. You will notice it is capital intensive. On the paid-up capital requirement for long term business ( life insurance company) is Ksh400 million, short term business (general insurance business) is Kh600 million and Reinsurance business requires a cool Ksh1 billion shillings.”
To understand this model, Ensign will bring in the “cell captive concept,” which is basically a virtual insurance company that is jointly owned by clients and the cell captive insurer (underwriter).
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A licensed insurer forms ring-fenced cells issued to other cell owners for the insurance of its customers. “The cell owners then enjoy the benefits of an insurer without setting up their own insurance company,” he adds.
This is what Ensign IB is – a cell owner. For purposes of illustration, take the example of an apartment block.
If you own the entire apartment building, and the land that lies beneath it, you are the cell captive insurer (insurance company). If you own one of the apartments in the building, you own a cell within the cell captive insurer (cell owner).
“One of the main advantages of the above model is that it reduces significantly the cost of setting up a conventional insurance company,” CEO Njoroge adds. “Also, unlike the traditional insurance process flow, one has direct access to both insurance and reinsurance markets.”
Within this model, the cell captive insurer allows the cell owner to behave like an insurer. They are allowed to manage their own portfolio without much interference from the captive insurer. The cell owner has flexibility in terms of coming up with new products and pricing them with the help of actuaries.
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In as far as day-to-day operations of Ensign IB is concerned, there are apparently five key drivers that separate it from the rest of the insurance industry, and Ms. Mwiti goes through the indices, pointing them out one.
“First,” she raises her pointer finger, “we have excellent customer service because our customer isn’t just a king, the client is our empress,” and wiggles her index for greater emphasis.
The cell owner has flexibility in terms of coming up with new products and pricing them with the help of actuaries.
“Secondly,” her middle finger joins the pointer,” at Ensign we actually negotiate premiums for our clients so that they have value for money for the insurance products that they’ve purchased.”
”Thirdly – through our robust digitalized system at Ensign, we ensure efficiency in our service delivery,” she says, raising her ring finger like a promise of a blissful union between company and customer.
Lastly, and as a rule of thumb, in the event of a claim, Victoria claims they do process claims faster, a sticking point with too many insurance firms, “as anyone who has been in a car accident, and goes through claiming process, will attest.”
