Equity Ventures into Full-time General Insurance

As it enters the general insurance sector, Equity Group Holdings is aiming for a larger share of Kenya’s insurance market.

This implies that Equity will engage in the underwriting of fire, marine, motor, accident, and other non-life insurance products.

The lender has gained authorisation in principle from the Insurance Regulatory Authority (IRA) to establish a general insurance firm, a move that will probably upend the industry, which at the moment has 56 significant players.

Following the profitable launch of Equity Life Assurance Kenya’s (ELAK) life insurance company last year, an application for a general insurance business license has been made.

After receiving a product license, ELAK ran for nine months during which time it generated Sh3.99 billion in gross written premium.

Despite 4.1 million policies distributed, it reported an Sh281 million profit after tax. The value of all assets was Sh5.5 billion.

With a declared gross return of 9% for 2022, it had a deposit administration of Sh339 million.

It is ranked second in group credit life, where it holds a 24% market share, and tenth in gross written premiums among the top 25 life insurance providers, where it holds a 2.97% share overall.

“The impact of the early success of the life insurance business inspired the board to seek the general insurance business licence in the hope that Equity Insurance business will contribute in innovatively transforming the insurance industry,” it said in a statement yesterday.

Subject to IRA approval, the board has appointed Jonas Mushosho to serve as the inaugural Chairman.

Afri Exim Bank’s Insurance Trade Finance Program Coordinator is Mushosho at the moment.

He formerly held a number of positions with Old Mutual, including managing director for the rest of Africa, group CEO for Old Mutual-Zimbabwe, and MD for Old Mutual Life-Zimbabwe.

Despite Kenya leading the region in the acceptance of insurance, the country now has a low insurance penetration rate of 2.43 percent.

Burundi (0.77%), Rwanda (1.70%), Uganda (0.84%), and Tanzania (0.53%) are the next three countries to have a penetration rate.

In Africa, there are only 0.3% of people have insurance.

Despite insurance’s significant contribution to socioeconomic growth, there have been concerns about questionable schemes that have led to the public’s continued skepticism about signing up for it.

Another significant issue is premium undercutting by businesses as they compete for market share, a practice that has been linked to the industry’s underwriting losses.