It was a warm Friday mid-morning as Tom and Mary packed their bags and patiently waited for the taxi that would take them to Wilson airport to catch a flight to the Masai Mara for their weekend getaway. Their trusted domestic manager Juma cheerily waved them goodbye after carefully placing their luggage in the back of the taxi. After a memorable weekend, Tom and Mary returned to Nairobi on Monday evening, finding the house in total darkness. “That’s strange,” Mary said as Juma would usually be in the house making dinner. Their car, which had been left parked in the little alcove next to the front door of the gated community town house, sat at an odd angle with the front door partly open. Tom approached the car carefully, brows furrowed in curiosity at what appeared to be strange circumstances. He gasped out “Oh my God,” before running to the front of the car in visible shock. The car had clearly been in an accident with massive damage to the front bonnet and bumper. Mary opened the door to the house, hoping to find Juma who was the only one who could explain what had happened. Juma was nowhere to be seen. With no Juma to explain and  no car to speak of, the couple hoped that the story would unravel in due course while praying feverishly that there were no injuries that accompanied the badly damaged vehicle.

Insurance is defined as  an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium. Insurance is one of the most maligned and misunderstood products that we have. It is like a visit to the dentist for a root canal procedure: It has to be done and you desperately wish you didn’t have to, but the consequences for not doing it are debilitating. But why is this product have such a poor penetration rate in Kenya? According the latest statistics from the Insurance Regulatory Authority’s 2019 annual report, the insurance penetration in Kenya declined from 2.43% in 2018 to 2.34% in 2019. The decline has been as steady as the numbers of physical letters you receive in the post office box (assuming you even have one) from a blink-and-you-miss-it high of 2.75% in 2015 to 2.71% in 2016 and 2.68% in 2017. It would take more than ten opinion pieces to try and unpack what’s going on in the Kenyan insurance industry, but it turns out that we are actually in the top three insurance markets in Africa.

The South Africans by far and away signed up to a different Whatsapp group and, perhaps due to their extremely developed and high value manufacturing and service industry, take up 69% of the written premium market share, followed by Morocco at 6.8%, with Kenya trailing on the podium at third place with 3.3% of Africa’s written premium but ahead of economic giant Nigeria who is fourth place at 2.4%.

What do these numbers potentially indicate? First off, Africans clearly don’t like insurance, don’t understand it and the sun rises and sets every day on our blessed continent without us natives seeing the need to take it up. Our declining penetration rates in Kenya alone is a worrying indication that something is not well understood or working from a customer perspective. And yet, here is the paradox, the same IRA report shows that service providers in that segment are increasing, for instance five insurance brokers, sixteen insurance investigators and 1,859 more insurance agents were registered in 2019. The growth in insurance investigator numbers I can understand as Kenyan insurance fraud is at James Bond Live and Let Die levels. But the higher growth of insurance agents juxtaposed to the declining penetration numbers indicates that either the industry as a whole has completely lost any impetus to innovate or, if such innovation is happening, it’s only visible to a burgeoning agent class.

Did Mary and Tom get a return on their comprehensive insurance investment once the dust settled and was Juma ever found? Come back here next week to find out how Mary plus a few million other unwilling insurance policy holders are gagged and hog tied to their insurance companies in indignant resignation which possibly explains why the rate continues to decline year on year.