MY VIEW: KPMG associate director James Norman during the insurance conference in Nairobi.
By LOLA OKULO
CUSTOMERS will drive new distribution models for insurance products although there is enough room for banks and agents to co-exist, a market analyst from consultants KPMG has said.
Addressing delegates at the inaugural East Africa Insurance Conference hosted by the audit and consultancy firm, its lead for insurance in the region, James Norman said each seller must focus on understanding their role in the market but the ultimate decision on distribution models will be made by the customers.
“Agents and banks can co-exist easily because the space is big enough for everyone. The more the distribution channels the more the penetration,” added Norman.
Kenya’s insurance market penetration stands at three per cent. Banks and agents have previously clashed over misinterpretation of the bancassurance selling model. Agents accused banks of arm-twisting their clients to buy insurance from select clients, thereby skewing the market to benefit a few insurance companies.
Speaking to the Star on the sidelines of the event, Bima Intermediaries Association of Kenya chairman Washington Ndegea echoed Norman’s sentiments adding that the market was big for every middleman as long as rules are followed to level the playing field.
BIAK is a lobby group comprising mostly of insurance agents.
KPMG’s head of insurance globally, Gary Reader said all insurance players will have to adopt to changing market trends especially driven by new technologies if they are to remain in business.
According to a KPMG global study on the insurance industry presented at the conference yesterday, less than half of the market players have formalised their innovation strategies despite majority – 83 per cent- saying they believed innovation is closely tied to future success of their companies.
The study shows 48 per cent of insurance executives believe competitors are to blame for the disruption of of their business models.