The outlook for Kenya's insurance sector is bright and the market is expected to rebound this year after experiencing headwinds last year, the international professional services firm EY has said.
According to a study by EY, growth in Kenya's life assurance sector will be driven by demand from young people, reported the newspaper, The Star.
‘’More young people are entering the job market faster than at any other time in our history, a trend that will be sustained for the coming decades,’’ the EY report said.
This is good news to the sector in which profits plunged by 61.5% in 2018. One reason for the profit decline was the capping of interest rates since 2016 that continues to have a ripple effect on business because lending to insurable investment projects and assets remains constrained.
According to the study, demand for all types of insurance common to workers will grow. Furthermore, pension funds will balloon.
The report advises insurance companies to meet the aspirations of millennials in developing new products and devising new methods of delivering services to their customers.
While Kenya leads the rest of East Africa in insurance penetration, its 2.9% penetration rate is still rather low compared to mature markets like South Africa with a 14% penetration level.