KCB and National Bank of Kenya have partnered with Sanlam Life Insurance to enhance the adoption of life insurance products in Kenya, as they have signed a distribution agreement. This collaboration will enable customers to access a wide array of financial and investment products through KCB Bancassurance Intermediary Limited (KBIL) and National Bank Bancassurance Intermediary Limited (NBIL), which operate within the banks’ combined network of 300 branches.
This will see KBIL and NBIL distribute life insurance products, underwritten by Sanlam. The partners have also rolled out an endowment policy dubbed Nawiri, a savings and investment product that offers a guaranteed return after a specific period of time.
They have also introduced an enhanced education policy—Elimisha Plus Cover—and a more robust Last expense Cover, a funeral insurance product that helps cover the costs associated with bereavement. Nawiri comes with a tax relief element while the bereavement cover brings a tax-free death benefit upon the demise of a policy holder makes this a suitable option for investment.
“We are reimagining insurance by leveraging the existing offerings and rethinking the distribution model to ensure we take the products to the uninsured population across the counties and every corner of the country” said Mrs. Annastacia Kimtai, the Managing Director at KCB Bank Kenya.
The proposition is expected to deepen KCB and NBK play in the insurance market, effectively boosting Kenya’s life insurance penetration rate which currently stands at 1.3 per cent according to the regulator Insurance Regulatory Authority (IRA).
Sanlam Kenya Group CEO, Dr. Nyamemba Tumbo said: “For customers who prefer to receive services from a one-stop-shop like a bank, this partnership comes in handy for them as they will now be able to access a full suite of financial services to meet their long-term investment needs. We shall therefore leverage our distribution and processing capabilities, stronger brand visibility and a greater degree of public trust to deliver a superior customer and product experience,” Said Mr. Tumbo.
Overtime, the bancassurance distribution channel has emerged as the natural choice for mass-market clients looking for simple and low-cost products being offered by financial institutions.
Godfrey Kiptum, Commissioner of Insurance & Chief Executive Officer at Insurance Regulation Authority lauded the partnership between the three entities noting that since the inception of the Bancassurance model of distribution in 2004, it has played a critical role in supporting the financial dreams of our customers.
“As the industry regulator, we welcome this move as we see it as an opportunity to meaningfully improve bank customers’ financial security, lives, and businesses given the growing awareness among customers about protection and the need to financially secure themselves through a robust financial plan,” said Mr. Kiptum.
The Association of Kenya Insurers in its 2017 study indicated that about KShs. 6 billion of life business was through bancassurance while that of non-life was estimated at KShs. 10 billion. This points to a growing need for the model of distribution to be utilized optimally to unlock greater returns.