In an effort to diversify its fast-expanding revenue streams across the East African region, Equity Group ventured into the insurance business after receiving its license in early 2022.

A life insurance license was issued to Equity Life Assurance (Kenya) Ltd (ELAK), which is fully owned by Equity Group Insurance Holdings Limited (EGIHL), a subsidiary of Equity Group.

ELAK then started providing life insurance solutions to an underserved market and contributing towards the Group’s vision to transform lives and expand wealth creation opportunities.

As revealed when Equity Group released its Q3 2024 financial results, ELAK now intends to go big on health and general insurance, banking on the success of its life insurance segment.

Speaking in an exclusive interview with Swala Nyeti, Angela Okinda, Managing Director of Equity Life Assurance (Kenya) Ltd, beamed with pride at the exemplary strides the insurance business has so far made in just two years.

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She revealed that Equity ventured into insurance to take care of the holistic needs of its customers after realizing about 40 per cent of them were defaulting on their loans due to a health or death event.

Angela says life insurance, which set off the business, has raked in more than Sh1 billion in profit before tax and issued more than 13.2 million policies in the past 13 months alone.

“This is a demonstration that customers can really trust insurance provided by Equity in a market where the insurance penetration is very low, and the lever of trust between insurers and customers is also quite low,” opined Angela gleefully.

“We believe that we have set a very strong foundation and in 2025-2026 we will now be rolling out other insurance products and also providing them with digital tools so that every person, whether you are corporate, retail or SME, you have access to all insurance solutions to protect your entire team.”

Equity is, however, venturing into the insurance business at a time when the sector is facing turmoil that has seen a number of insurance firms fold or go into statutory management.

But the ELAK MD tells Swala Nyeti that Equity has picked key lessons in the last few years that it believes will enable it to avert the pitfalls hammering the insurance sector in Kenya.

Three Key Lessons

Firstly, the MD says Equity has ensured all its insurance products are designed to meet the needs of the individual customer after spending time and resources to learn its customers.

“When you look at the current solutions in the market, a lot of them do not meet the customer needs, so we spent a little more time trying to understand what the customer wants and we designed products that are fit-for-purpose.

“As we roll out the products, we see they are very different, they are actually designed to fit within the wallet of every customer. They are bundled so that every customer can afford them, whether they are formally or informally employed, and we have actually bundled them to your lifestyle.”

Secondly, Angela intimated that ELAK has been availing its insurance products where the customer would like to transact making it more convenient and accessible countrywide.

“Our customers are very diverse; some of them are very sophisticated - they want advisory relationships, but some of them are like you and me who are using a feature phone or a smartphone.

“So, we have ensured our products are available across all channels - branch, mobile and web, so that any customer wanting insurance doesn’t have to leave the comfort of their home. They can access those products at any time.”

Finally, Angela says ELAK has worked extra hard to get the pricing right given insurance products in the current market are considered to be quite expensive for ordinary folk.

“What we have done is we have ensured we have priced our products to be very affordable for the everyday customer.

“As we know the Equity customer actually represents the market, so when we designed the products for them, we actually know that we have designed products that are fit-for-purpose but also affordable and accessible through all our channels.”

Penetration Ambition

The ELAK boss is bullish Equity insurance products will continue posting some impressive numbers going into the 2024-2025 Full Year and the following 2025-2026 financial year.

She remains optimistic that, through the financial support of Equity Group and its shareholders, ELAK will also markedly grow its novel health and general insurance products.

“currently, from a capital perspective, the (insurance) business is well supported by shareholders. We have life insurance business that, over and above nominal capital, of Sh400 million. We did receive operating capital of Sh200 million.

We now have a general insurance business, as well as a health insurance business, capitalized at Sh800 million each. So, capital for us is not a challenge, the bigger challenge is what will we use with that capital to provide a customer value proposition that is worthwhile, but in the end to convert it into returns for our shareholders.”

Equity Group is banking on the model show of its life insurance business, which recorded an average Return on Equity of 57 per cent compared to the market average of 18-20 per cent, to propel its health and general insurance to complete its strategy of offering full insurance.

According to the Insurance Industry Annual Report 2022 by Insurance Regulatory Authority (IRA), insurance penetration in Kenya has dipped from 2.34 per cent in 2019 to 2.29 per cent in 2024 hence the need for more solutions that match the needs of the modern consumer, akin to what Equity is offering its customers in a bid to reverse the trend.