Sammy M Makove, Commissioner of Insurance and CEO, Insurance Regulatory Authority (IRA): Interview

Sammy M Makove, Commissioner of Insurance and CEO, Insurance Regulatory Authority (IRA)

Interview: Sammy M Makove

What prompted the move to a risk-based supervision model from a compliance-based one?

SAMMY M MAKOVE: Moving to a risk-based supervision model is really part of the natural evolution of the sector and brings the Kenyan insurance industry in line with its global peers. It is a more effective method of regulation and will lead to a more robust and dynamic industry. Of course there will be costs, as there are whenever a market undertakes a significant change. This will include training staff and boosting sector capacity, as well as producing tools for the implementation of the new approach, such as capital models. The IRA will be directly engaging with the private sector to this end, as this model of supervision requires much better corporate governance, something that has sometimes been lacking in the industry.

How could consolidation benefit the sector?

MAKOVE: The trend of consolidation through mergers and acquisitions has already been observed, and we expect this to continue in the coming years. We see this as generally a positive development in the market, as it will lead to stronger companies with more substantial capital foundations, creating a more resilient industry. We are aware of several ongoing consultations and expect a few transactions in 2015.

Are other distribution channels being explored?

MAKOVE: The industry is looking at alternative distribution models to expand access to products. We are especially impressed by the strategies that have led to a huge increase in Kenya’s banked population, and the insurance industry is now not only learning from the banking sector’s experience, but also directly working with the sector. Bancassurance has already been introduced with good results, and we are also looking at how we can better leverage technology. As we see it, a deeper embrace of technology is unavoidable, especially as we move to a cashless economy.

What can be done to improve premium volumes?

MAKOVE: Interestingly, at a recent meeting with the market regulators from other African countries, we spoke about the potential to boost penetration by making certain types of insurance compulsory, as is the case in Kenya with third-party vehicle insurance. However, it is unclear if such a strategy would be effective for other types of insurance, and such a policy would be difficult to enforce. More concretely, we are working with several associations and brokers on new strategies to engage the population, improve the sector’s quality and expand the range of services.

One of the major current initiatives is to raise consumer awareness by conducting national media and education campaigns. Within the counties, we have partnered with county governments and have trained and commissioned “insurance ambassadors” to increase sector visibility and sell products at this level. We have also partnered with the Ministry of Education to improve financial literacy and increase awareness through the student population of the country. By ensuring that Kenyans see the value of insurance at a younger age, we hope that they will become consumers of insurance products later in life.

How are agriculture and livestock policies viewed?

MAKOVE: Kenya’s economy is still largely dependent on agriculture, and it is thus essential to boost agricultural coverage to protect farmers. The key here is not only education and publicity, but also to offer products that this segment of the market understands and sees as relevant. Until now, most of the products in the market have been traditional agricultural products. We would of course like to see the launch of more advanced coverage, such as climate-indexed products, but this would require serious investments in technology and infrastructure to allow for reliable data on climate patterns to be collected and would entail collaboration beyond the insurance industry.

Anchor text: 
Sammy M Makove

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The Report: Kenya 2016

The Guide

Table of Content

Insurance chapter from The Report: Kenya 2016

Insurance chapter from The Guide

Insurance chapter from Table of Content

The Report: Kenya 2016

The Report

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