Equity, Kenya’s top lender, has stepped up its push into the country’s nascent insurance sector after receiving regulatory approval to expand its insurance offerings, taking the fight to traditional local insurers.
The bank revealed its plans to take the competition to the doorsteps of traditional insurers yesterday, after posting a 12 per cent increase in net profit to Sh28.5 billion for the half-year that ended June.
Equity said it was recently granted a general insurance license in addition to its existing life assurance license, allowing it to offer “holistic and integrated financial services” to corporate, small and medium enterprises (SMEs) and retail customers.
“The group was recently granted a general insurance license in addition to the already existing life assurance license,” said the lender.
“By leveraging on the strategic capabilities and partnerships in banking, healthcare, distribution, SMEs, agriculture and technology sectors, the group aims to provide customer-centric, digital-first and efficient products that are accessible to millions of customers and enable them to bridge the protection gap and fulfil their goals,” the bank said.
Equity’s insurance subsidiary reported a 27 per cent rise in revenue to Sh1.03 billion, underscoring the bank’s ambitions in the sector.
Equity Group Chief Executive James Mwangi had previously projected that the bank’s insurance business could outperform its core banking operations as early as 2030 if the current growth trajectory continues.
Kenya’s insurance industry, valued at Sh309 billion, is expected to grow at a 10 per cent compound annual rate despite macroeconomic headwinds. Equity net earnings were buoyed by higher income even as regional subsidiaries supported the bottom line.
The tier-one lender reported Sh25.4 billion in net earnings over the same period last year.
The new license deal will see Equity take the battle for the nascent insurance sector to traditional insurers, at a time when insurance is seen as a new growth frontier.
Mr Mwangi projected earlier that Equity Bank’s insurance subsidiary could outperform its banking counterpart as early as 2030 if sales continue on a similar trajectory.
Kenya’s sizeable insurance industry is valued at Sh309 billion and is tipped to grow at a 10 per cent compound annual growth rate (CAGR) despite macroeconomic challenges.
Another tier-one lender NCBA Group recently took a major step in its quest for a larger slice of the Kenyan insurance market, finalising the 100 per cent acquisition of AIG Kenya Insurance Company Ltd (AIG Kenya).
This strategic move brought AIG Kenya, a 50-year-old player with a strong reputation in general insurance, under NCBA’s umbrella.
Equity is the second lender to release its half-year results.
Stanbic Holdings said recently it posted a 2.3 per cent jump in net profit to hit Sh7.2 billion in the half-year ended June, boosted by higher interest income.
