Financial challenges key factor for low insurance uptake
A recent awareness survey by the Association of Kenya Insurers found that majority of Kenyans have a basic understanding of the concept of insurance. Households not using any insurance products cite financial constraints as the biggest barrier followed by lack of knowledge on insurance products. On the other hand, lapsed usage by individuals is mainly driven by lack of finance. With the difficult economic situation, consumers find it difficult to continue contributing towards insurance.
Insurance is also plagued with misconceptions such as, insurance is expensive and therefore a luxury purchase; low trust in insurers and that taking up insurance invites bad luck.
The study found that most households associate insurance with medical insurance, motor insurance and with fire and burglary covers. TV and word of mouth are the most popular sources of insurance information for individuals, while insurance agents are the most influential information source for businesses.
Most individuals are most concerned about the high cost of medical care, job loss and property loss through theft. To cope with these risks, majority lean on support from family and friends while some take up insurance. For businesses, their biggest concern is property loss through damage, fire, and theft. Majority of them have taken or plan to take insurance to cope with these risks. They also resort to other measures like enhancing security.
The adoption of technology in the industry has been positively received by customers who are very satisfied with the efficient and convenient services.
The main objective of the survey was to track overall insurance awareness and customer satisfaction levels in four specific thematic areas awareness, usage, needs understanding and satisfaction. The survey was conducted between March and June 2021 at both household level and institutions across eight major towns, covering both rural, peri-urban and urban areas, in Nairobi, Mombasa, Kisumu, Nakuru, Meru, Nyeri, Machakos and Eldoret.
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