NCBA Group and Sanlam Life Insurance have partnered to offer customers new life insurance products; Digital Last Expense, which will cover funeral costs, and Go Educator, which will enable users to pay for education.
The move aims to make life insurance more accessible to Kenyans by addressing the low uptake caused by financial constraints and a lack of information on the products.
Kenya’s insurance uptake remains low compared to its potential, with insurance contributing less than 3% to the nation’s GDP as of recent estimates.
As of the first half of 2024, the penetration rate stood at approximately 2.4%, a slight increase from 2.3% in 2022. This rate is significantly below the global average of about 7%.
Despite these challenges, the insurance sector in Kenya has shown resilience and growth in certain areas.
In 2023, the industry recorded a 16.7% growth in gross premiums, reaching Sh 361.4 billion, up from Sh 309.8 billion in 2022.
This new partnership will enable NCBA and Sanlam Life Insurance to educate customers on their offerings and services.
NCBA Group Managing Director John Gachora said the collaboration with Sanlam Life Insurance represents a significant step forward in the bank’s commitment to providing comprehensive financial solutions to its customers.
“By offering these innovative life insurance products, we aim to enhance the financial well-being of our clients and ensure they have the necessary support during critical moments in their lives,” Gachora said.
“We believe this partnership will significantly boost the uptake of life insurance in Kenya, addressing key barriers and misconceptions that have hindered its growth.”
Speaking during a media brief, NCBA Bancassurance Intermediary MD Samuel Otieno noted that the execution of both products will be leveraged on the 1550 staff who are trained across all NCBA branches to ensure that they meet the customers at their point of need.
The new products will be made available to customers through the bank’s Bancassurance Intermediary.
It will ensure that the products are easily accessible to customers across Kenya.
This strategic distribution approach aims to seamlessly integrate life insurance into their customers’ financial planning.
“At NCBA our mission is to ensure that our customers get access to essential financial services and by that deepen financial inclusion,” Otieno said.
“Our partnership with Sanlam brings together two giants where we can leverage our infrastructure and our footprint to expand access to insurance and ensure that inclusivity is attained.”
Otieno further said they have flagged off financial fitness programmes in order to reach out to different customers as a way of creating awareness adding that the products come in at the tail end of achieving customer education.
“Over the next one year, we are looking at doing gross rated premiums of over Sh 200 million in sales. This is very achievable across our 100 branches,” Otieno said.
“We are known to be a very innovative bank and a lot of our services are digital. Our Digital Last Expense will be accessible on the progressive web application that we have co-developed with Sanlam. We are, however, targeting to transition that platform into our mobile banking platform.”
This ensures that whenever a customer is doing their banking transactions from the NCBA Now App, there will also be a tab where they can click and access these products easily.
Under the Digital Last Expense, for as low as Sh 108 per month, Otieno added that a nuclear family can be covered for up to Sh 50,000 per member of the family.
If one agrees to part with Sh 900 per month, they will be able to get a limit of Sh 500,000 in terms of coverage per member of the family.
On his part, Sanlam Kenya Plc Group CEO Nyamemba Patrick Tumbo said that for customers who prefer to receive services from a one-stop-shop like a bank, the partnership comes in handy as they will now be able to access a full suite of financial services to meet their long-term, investment needs.
“The convenience we find is that NCBA is well established, as well as the management and branch networks making it a perfect match in ensuring that insurance is easily available to all customers,” he said.
“We will provide the protection while NCBA provides the platform for distribution. We want to make sure that insurance that is available in all branches will also be available on the app to ensure inclusion for different Kenyan households.”
With affordability being a major concern that limits insurance uptake, Tumbo said the products are designed to make sure that the sums assured are flexible.
This means each individual takes up a cover based on their means and payment is made when one has the money.
“So the cover won’t lapse if let’s say the customer defaulted for like a month or so. We want to create a situation where a customer can even pay in bulk for three months or so, making it easier for them and more affordable,” Tumbo added.
Insurance Regulatory Authority (IRA) Market Conduct Director Anne Chelagat noted that the Regulator has been encouraging the industry to adopt more partnerships in order to grow especially in the life business.
She said this is because the uptake is not where it is supposed to be and penetration is low.
Chelagat said that the newly launched products are protection-focused as opposed to investment-focused adding that the Regulator plans to do a lot of consumer awareness in counties as a way of educating the masses on insurance and services that are offered within the industry as well as products that are currently in the market.
“This is also done on social media and even traditional mainstream and digital media to support the insurance industry in terms of products that are out there,” Chelagat said.
“We are looking to complement the efforts being done by Sanlam and NCBA to ensure that insurance adoption rates grow in the country.”
“We will monitor the feedback through onsite inspections, gain insights from the consumers and assess reports from the insurance providers. We will keep a watchful eye.”
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