What ails Insurance Industry: #ChaseDebate
Yesterday at around lunch hour the Chase Bank started a debate on what ails the Insurance industry on twitter under the #hashtag #ChaseDebate. Instruction in the tweet was that today at 11AM tweeps should join Chase Bank in discussing whatever it is that ails the Insurance Industry.
Since 11AM today #ChaseDebate was a trending topic in Kenya for close to four hours. The debate identified several issues but we want to focus on three:
1. The insurance companies seem not to be aware of the insurance needs of Kenyans. Madison Insurance acknowledged that the insurance industry lacks innovative products that the public can resonate with. Given that Kenyans seem to wait for disaster to realize the need for acquiring an insurance package, with most people thinking that insurance is limited to those who have cars, we find since the insurance companies have no idea what the insurance needs of Kenyans are, the over 40 licensed insurance firms have managed only a 9% market penetration.
2. The second and most important issue is on education. Insurance firms have not gone out to effectively educate the population on the insurance products available, the need for having an insurance policy against life, property, education, health, disaster, etc, and also to explain to the layman in simple terms that insurance policies and accompanying terms and conditions that are always written in hard to understand jargon. Almost all insurance firms rely on the sales persons who were mentioned in the debate as people who are not willing to share with potentials clients every detail regarding a policy as they might end up not selling the policies. As a result, most Kenyans do not know the insurance options suitable for their particular circumstances.
Do we as Kenyans understand why we need insurance in our lives or we need calamities to make us understand why #ChaseDebate
3. Lastly the problem that ails the insurance industry that needs immediate redress is the issue of premiums on several policies. There was this time that a close friend who works in the insurance industry came to share with me about their child education policy. After doing some calculations and compared that with the option of taking life insurance separately as I save for the kid, I found out that I better save and take a separate insurance policy. The insurance firms need to do a lot of comparative studies on options available that could be policy competitors. Also as they do research on products that can easily sell to the different segments of the society, they need to determine premium rates that are indeed economically justifiable. Truth is most Kenyans think that taking insurance policies is a matter of giving someone money without returns.
This means that the insurance firms, as they go back to strategize on how to have increased market penetration, they need to come up with a civic education programme that will not only convince the public on the importance of acquiring suitable insurance policies but also to vividly explain, in simple language, how insurance is indeed a form of investment with short term and long term real returns.
But insurance firms need to spend more on civic education to get the populace to understand what theri products are all about #ChaseDebate
Important for the insurance industry is to assure the public that their future is secure, safe and almost all stumbling blocks that they might meet along the way has been taken good care of. The big problem with insurance companies is the information the public gets when they fail to compensate those who have been involved in disasters. Those who lost property via fire during the post election violence, those who lost their businesses and cars during the Westgate attack, and those who have not been able to get compensation for one reason or another, when the public is fed such news by the media, then the insurance firms should not be surprised that the public is skeptical on matters insurance. As Muthoni rightly says below, there is a great feeling when one knows that the future is secure. Sadly, Insurance industry does not really guarantee this future.
When one insures property against fire, and someone torches the property during PEV, what difference does it make if the same person torched the house out of ordinary squabble?
The peace of mind derived from knowing you are secure in future is great. Exactly what Insurance guarantees #ChaseDebate
Some other tweets we found interesting are pasted below:
Lack of edu, innovation, too much regulation, lack of sustainable partnership&forced mergers has seen the industry stagnate. #ChaseDebate
A bright idea would be to patner with a trusted brand like Safaricom before they decide to get into the market themselves #ChaseDebate
Could the Insurance Exchange as employed in the Obamacare Health Scheme be the solution to poor intake of insurance in Kenya? #ChaseDebate
2:insurance stakeholders must rebrand the word *insurance brokers* it sounds rogue #ChaseDebate