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ITM: As an association, AKI, was created to spearhead the development of a strong insurance industry in Kenya. To what extent has it achieved this objective? Mutiga: AKI has developed the industry over the years through lobbying, partnership with the Insurance Regulatory Authority (IRA), data collection and dissemination, enforcement of the AKI Code of Ethics, and creating awareness of insurance products to the public. The AKI Strategy Plan for the period 2011-2015 had the strategic objective to achieve Ksh200 billion ($2 billion) in industry revenue by 2015. It is estimated that 95 per cent of the target was achieved, which is Ksh190 billion ($1.9 billion). ITM: What is the current state of the insurance market in Kenya? Mutiga: The insurance business in Kenya is proftable. Kenya represents one of the most developed and wellregulated insurance markets in Africa. The market is of interest to foreigners because it is one of the fastest growing. The life insurance penetration is 1.2 per cent of GDP, and non-life is about twice that of life, bringing the total to 3.44 per cent in 2013. The insurance penetration dropped to 2.93 per cent in 2014 after GDP was rebased with a 25 per cent increase. ITM: Apart from a low uptake of insurance products and negative public perception, what other critical challenges exist in Kenya’s insurance market? What is AKI’s strategy to reverse the trend?

Mutiga: Fraudulent claims are a major challenge. It is estimated that 25 per cent of motor claims could be fraudulent. The AKI strategy on fraudulent claims is to develop a database for insurers to share data on fraudulent claims. Also, IRA has established a fraud investigation unit. Moreover, most insurers chase the middleto-higher income customers to sell their products. AKI has formed a committee to deal with matters relating to microinsurance so that members can develop products for the bottom-of-thepyramid bracket of the population. ITM: AKI signed a memorandum of understanding with fve other East African insurance a s s o c i a t i o n s to facilitate implementation of the Common M a r k e t P r o t o c o l , leading to standardization and cross-border operations for the insurance sector. What progress has been achieved on this front? Mutiga: The association has already fnalized its constitution and is in the processes of developing a strategic plan which will guide it in its activities. The main areas of concern are taxation in the countries of East Africa and laws governing the conduct of insurance. ITM: In 2014, gross written premiums for life insurance in Kenya was Ksh56.9 billion ($569 million) compared to Ksh100.2 billion ($1 billion) for non-life business. What are the main reasons for this imbalance? What measures have AKI put in place to correct this situation? Life insurance is not a basic need for many families in Kenya. Life insurance is considered a luxury and does not constitute most of the family’s budget. Also, life insurance is sold, not bought. Some classes of general insurance are compulsory and so people must take the compulsory insurances. In order to arrest the situation, AKI has taken the following steps. Focused on educating the public on the benefts of life assurance. Lobbied with the government to insure its employees. Pushed for insurance to be taught in schools. ITM: Kenya’s insurance market incurred a hefty increase in net claims in 2014, totaling Ksh82.36 billion ($823.6 million), representing an increase of 25.8 per cent over 2013. What was the cause of this increase and what remedial action has been taken? Mutiga: Out of the total incurred claims, motor insurance contributed 50.9 per cent of incurred claims, and medical insurance 29.9 per cent. These claims are faced with problems of fraud, according to a recent IRA study (“Study on Nature and Extent of Fraud in the Insurance Industry”). AKI has advised its members to take the following measures:Medical Insurance: they should use technology (biometrics) to identify their insureds. Developing an Integrated Motor Insurance Database for members to share information IRA has also encouraged the insurance industry to share information on fraud. ITM: Some 39 Kenyan insurance companies did not surrender unclaimed assets by the 1 November 2015 deadline as required by the Unclaimed Financial Assets Authority (UFAA). What is AKI’S perspective on this matter? Mutiga: AKI’s view is that if members have unclaimed fnancial assets, the law must be followed by surrendering the assets to UFAA. But claims must be documented to prove they are genuine. ITM: The industry lags behind other sectors in embracing modern technology to enhance market expansion, service delivery and customer value addition. What measures has AKI put in place to improve the situation? Mutiga: Infuencing directly how our members adopt ICT is diffcult. However, ICT is still a critical objective, and the goals need to be focused into activities such as providing common data-sharing platforms. I must commend our members who have embraced technology in the following areas: Making payments; Selling of their products; Serving their customers; andHaving paperless offces ITM: What is AKI’s strategic development plan for the industry over the next fveyear period? Mutiga: For the 2016-2020 strategy, AKI has set a new strategic focus to champion sustainable industry growth and excellence, with the aim of achieving 6.5 per cent penetration, Ksh10,000 ($100) premium per head (density) and Ksh500 billion ($5 billion) in industry revenue. This will be achieved by focusing on the following four strategic objectives. Maximizing value for customers; Improving operational effciency; Creating sustainable revenue streams; and Empowering and motivating teams.

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