Insurers set their sights on youth to widen penetration

By Lillian Kiarie

Kenya: Underwriters are targeting youthful population in their campaign to widen insurance penetration in the country. According to a Youth Needs Assessment Survey 2013 done by SBO Research, insurance ranks a distant fourth among youth priorities, after bank account, house and laptop.

While the survey noted the youth had some significant income, only about two per cent of the same is allocated to insurance. The biggest chunk goes to clothing (21 per cent), savings (20 per cent) and airtime (17 per cent). 

Paying of bills and entertainment gobble up 15 and 12 per cent of youth budgets respectively.  Contribution to chamas and investment in property close the rank at eight and six per cent respectively.

 The Association of Kenya Insurers (AKI) commissioned the SBO market survey last year.

High premiums

The research revealed that insurance uptake among the youth was low due to lack of information, limited insurance products with strong appeal and high premiums charged.  Neglect of insurance by society’s most populous and energetic group has left the country’s state of insurance penetration at 3.16 per cent in 2012 from the 3.02 per cent in 2011.

AKI Chief Executive Tom Gichuhi urged more youthful consumers to take up insurance.

“The youth ought to realise that insurance offers reassurance, comfort and peace of mind. They, however, feel that these are not their immediate needs,” he said. “To them, the most ideal insurance products would be those that would help them save for short-term goals.” 

The survey also reveals that the youth view insurance with superstition, and fears as a result of negativity created in sales persuasion, that associates life products with death. AKI Chairman Mark Obuya said the youth are faced with poverty and an uncertain future due to lack of any form of social and economic protection. 

“As an industry, we want to be part of the solutions to problems affecting the youth. There is no better way to do that than to enhance financial inclusion,” said Obuya.  Life insurance premium and contributions have been growing steadily over the years.