Over 300 CEOs from 84 countries meet in Nairobi to deliberate on insurance sector
The insurance sector in Kenya has settled
claims worth over Ksh.5 billion owing to flood-related damages.
This was revealed during the inaugural
insurance CEOs forum that is underway in the capital, bringing together
over 300 CEOs from 84 countries to deliberate on the future of the insurance
sector.
This as the Insurance Regulatory Authority (IRA)
expressed concerns over the liquidity challenges facing some underwriters.
According to Kalai Musee, the IRA’s Senior
Manager of Supervision, some investments by several underwriters, particularly
in property, have led to liquidity challenges hindering their ability to settle
claims.
“We know there are a few
companies that could be struggling, and some of them technically because of the
economic situation…We have a lot of companies that have invested in properties
and you know you can use properties to settle claims. We have been talking to
them they address that so that they liquidate the properties,” said Musee.
The economic environment in the country has
also been cited as yet another challenge to underwriters' liquidity challenges
with unforeseen disasters taking a toll on the sector.
Dr. Hillary Wachinga, CEO, Kenya Reinsurance
Corporation, said: “Our economy is facing some liquidity challenges and that
makes it difficult to honor financial obligations. Insurance companies are
using artificial intelligence to robotic process automation in claims
management, meaning the time taken to settle claims has come down now…the point
of financial liquidity to honour those obligations is the challenge.”
Underwriters have been urged to work on
innovating products that address the dynamic risks they are facing, ranging
from natural disasters to cyber threats, and pandemics.
Regional insurance regulators have also been
encouraged to ensure companies have sufficient reserves to mitigate, growing
losses even as they promote risk reduction through environmental, social, and
governance criteria that also encourage green investment.
“We need to harmonise regulation, and we need
to have global best practices in the way we approach regulation and our
business, this event again is meant to invoke some thought processes but also
influence policy,” added Dr. Wachinga.
Treasury Cabinet Secretary John Mbadi noted: “By
working together we can ensure that everyone has the opportunity to achieve
their full potential free from the fear of financial ruin due to unexpected
events, because technology has opened up geographic borders…let us also
enhance provision of risk solutions that promote cross border trade.”
With an average penetration of 1.6
per cent across the continent, stakeholders have been urged to work on
products that will enhance penetration as well as ensure that their product
offerings remain sustainable.
The CEOs forum is set be an annual event to
help address the gaps that limit penetration across the continent as well as
foster collaboration and investment.
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