Nairobi Metropolitan: A vision 2030 Project

Consumer Education

We recognize that policyholders and potential policyholders have a right to deal with honest, trustworthy and knowledgeable insurers and intermediaries. Considering that insurers and intermediaries have a greater knowledge of insurance issues than the majority of policyholders, flow of information may be distorted. This is because by the very nature of insurance business, consumers may not be able to detect contracts that could be biased in favour of insurers or which may be interpreted to favour the insurer or simply fail to meet their needs. In addition, marketing methods could place potential policyholders under pressure to make a purchase decision

Through consumer education programmes, we seek sensitize the public on the importance of insurance, the reasons as to why one should have an insurance cover, types of products available on the market. Providing this information will not only improve insurer, intermediary and consumer relationships but also grow the insurance industry by strengthening consumer confidence.

Why consumer education?

Having recognized the need to sensitize the public to enable them appreciate the importance of insurance, the Consumer Education Department plays a lead role on this. Providing reliable information and advice to consumers and members of the public with a view to meeting their specific needs will lead to a better understanding of risk and insurance products. This will also enable them make better and informed purchase decisions.

What is insurance?

Insurance is promise of compensation for specific potential future losses in exchange for monetary compensation. It is a form of risk management in which the insured transfers the cost of potential loss to another entity (insurance company) and in exchange the insured pays reasonably affordable rates periodically to cover for the risk. These periodic payments are called premiums. With such premium payments, individuals, businesses and other entities stand protected against any eventuality (significant unexpected loss) that may occur and for which the insured has no control over. The loss is referred to as being significant because if the potential loss is small, then it doesn’t make sense to pay a premium to protect against the loss. Insurance is appropriate when you want to protect against a significant monetary loss and thus, through insurance, a person buys security and protection.

Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance.
Take life insurance as an example. If you are the primary breadwinner in your household, the loss of income that your family would experience as a result of your premature death is considered a significant loss and hardship that you should protect them against. It would be very difficult for your family to replace your income, so the monthly premiums which are normally ensure that if you die, your income will be replaced by the insured amount. The same principle applies to many other forms of insurance. If the potential loss will have a detrimental effect on the person or entity, insurance makes sense.

Why take Insurance?

The key role of insurance is to give protection to an individual or a community against monetary losses suffered and arising out of unforeseen circumstances. The world we live in is characterized by risk and uncertainty. People have always searched for security and protection from losses or contingencies. Insurance has evolved as one of the most important ways that provide this security. Insurance provides financial protection, vital for economic development and improves the standard of living of the community.

If you are considering protecting yourself, family or someone else against financial hardship should consider insurance. Situations anticipated or otherwise that may cause one to take insurance include although not limited to:

i. Protecting family after one’s death from loss of income
ii. Ensuring debt repayment after death
iii. Covering contingent issues
iv. Protecting against the death of a key employee or person in your business
v. Buying out a partner or co-shareholder after his or her death
vi. Protecting your business from business interruption and loss of income
vii. Protecting yourself against unforeseeable health expenses
viii. Protecting your home against theft, fire, flood and other hazards
ix. Protecting yourself against lawsuits
x. Protecting yourself in the event of disability
xi. Protecting your car against theft or losses incurred because of accidents

What are the benefits of Insurance?

Insurance provides several benefits to individuals, governments, and society at large.

1 Peace of Mind

When individuals know that insurance exists to meet financial consequences of their insurable risks, they will invest larger amounts of money than those they could have invested if it were not for insurance.

2 Protection

Life assurance policies offer financial protection to the dependants of the insured
person. A person who has a life policy is assured that in the event of one’s death, one’s dependants will be assured of a lump sum or an income to alleviate the financial consequences of the death.

3 Savings

Unlike life policies, general policies are usually for one year. General insurance
premiums are therefore usually put into short-term investments only. Premiums paid for life assurance however, constitute income saved now for future consumption.
A person who saves one’s current income for the future well being of one’s family generally ensures their future prosperity. The modest savings by many policyholders are paid in form of premiums to life companies.

4 Investment of Funds

Insurers have at their disposal large sums of money which they can lend to individuals, the government, commerce and industry. The funds arise from a time lag between when premiums are collected and when claims are paid. When borrowed, these funds are used for economic development. Insurance companies are major purchasers of treasury bills and other government securities.

5 Job Creation and Retention

Investors have the confidence to put money in commerce and industry because
insurers give assurance of compensation in the event of a loss. The investments create job opportunities in the society. At the same time, in the event of an unfavourable event, such as a .re, a company does not have to close down and render workers jobless because insurers compensate for the loss and, therefore, ensure that jobs are thereby retained.

What are some of the insurance options available in Kenyan Market?

  • Fire Insurance
  • Theft Insurance
  • Liability Insurance
  • Motor Insurance
  • Personal Accident
  • Engineering including Contractor’s All Risks
  • Workmen’s compensation/Employer’s Liability
  • Marine and Aviation
  • Long term insurance, which includes life assurance

What kind of insurance do I need?

You may need insurance cover for your business, car, home, health, life etc.
For further advice you may contact any licensed insurance company, insurance broker or insurance agent.

“Excerpt from IRA website”

The major Association of Kenya Insurers (AKI) members include:

  1. African Merchant Assurance Company (AMACO)
  2. APA Insurance Company
  3. Apollo Life Assurance Company
  4. Blue Shield Insurance Company
  5. British American Insurance Company
  6. Cannon Assurance Company
  7. Capex Life Assurance Company Limited
  8. CFC Life Assurance Company
  9. Chartis Kenyalnsurance Company
  10. Concord Insurance Company(under receivership)
  11. Co-operative Insurance Compapy
  12. Corporate Insurance Company
  13. Directline Assurance Company Ltd
  14. Fidelity Shield Insurance Company
  15. First Assurance Company
  16. Gateway
  17. Geminia Insurance Company
  18. GA Insurance Company
  19. Heritage Insurance Company
  20. ICEALION Group
  21. Intra Africa Assurance Company
  22. Jubilee Insurance Company
  23. Kenindia Assurance Company
  24. Kenyan Alliance Insurance Company
  25. Kenya Orient Insurance Company
  26. Madison Insurance Company
  27. Mayfair Insurance Company
  28. Mercantile Insurance Company
  29. Metropolitan Life Insurance Kenya Ltd.
  30. Monarch Insurance Company Limited
  31. Occidental Insurance Company
  32. Old Mutual Life Assurance Company
  33. Pan Africa Life Assurance Company
  34. Pacis Insurance Company Ltd
  35. Phoenix of East Africa Assurance Company
  36. Pioneer Life Assurance Company
  37. Real Insurance Company
  38. Shield Assurance Company
  39. Takaful Insurance of Africa
  40. Tausi Assurance Company
  41. Trident Insurance Company
  42. UAP Insurance Company
  43. UAP Life Insurance Company
  44. Xplico Insurance Company Limited