By: Elayne Wangalwa
UK’s biggest insurer, Prudential, is set to shake up Kenya’s insurance sector following the entry of the international firm in the country.
UK’s biggest insurer, Prudential, is set to shake up Kenya’s insurance sector following the entry of the international firm in the country.
The insurance firm entered the Kenyan market after buying out Shield Assurance Company Limited, a firm licenced in 2009 after a demerger from insurance company, BlueShield.
The firm with operations in the UK, US and Asia, is set to make Kenya’s capital the headquarters of a strategic new East African division.
"Kenya has a healthy life insurance industry which is good. The strong growth, their robust industry, it is a reasonable size. The penetration is still very low, it is still about one to two per cent of the GDP and some countries in Europe are six, seven and eight per cent of GDP," Matt Lilley, CEO of Prudential Africa told CNBC Africa.
The double-A rated firm with over 166 years of experience is planning to invest 1.5 million in the next 12 months and create 4,000 new jobs by 2020. This move by the London listed firm is expected to increase insurance penetration which stands at 3.4 per cent.
(READ MORE: Kenya's life insurance industry on the upswing)
"It will not be easy and quick. It will take a lot of time and a lot of hard work but over the last 25 years, we have built a very successful business in emerging markets like South East Asia by recruiting and training hundreds and thousands of insurance agents," Lilley said.
The UK firm has been eyeing markets in sub-Saharan Africa for its footprint expansion and Kenya has become the second African country the company is investing in after Ghana.
"We bought business in Ghana earlier in the year which is going very well for us and now we are excited to be building a business in the East Coast of Africa," Lilley said.
Daniel Kuyoh a research analyst at Kingdom Securities believes that the UK firm which controls assets worth over 60 trillion Kenyan shillings will make a dent into the country’s insurance sector if they look at other products such as technology and innovation.
"It will definitely increase penetration into the Kenyan market and we want to see them offering different products not the same health products among others that will give them a competitive edge in the insurance sector. We want to see something that will set them apart from others," Kuyoh said.
Source: CNBC Africa
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