Climate change has resulted in more frequent and unpredictable weather patterns, leading to increased risks such as floods and droughts. Insurers are increasingly shifting their focus from solely managing individual catastrophic events to understanding and addressing the complex interactions between global climate patterns and human systems. The insurance sector plays a critical role in supporting sustainable economic development and advancing Sustainable Development Goals (SDGs) by providing financial protection against climate risks and promoting resilience in communities.
Recently, torrential rains swept through the country, leading to the destruction of thousands of homes. Many families experienced devastating losses as their hard-earned homes and cherished possessions were damaged or destroyed with minimal warning. This highlights the critical importance of having home insurance. Home insurance serves as a financial safety net for homeowners and renters alike, providing coverage for losses and damages caused by natural disasters.
Weather-related disasters are not the only challenges homes encounter. Whether due to intentional acts, accidents, or structural wear and tear, homes are vulnerable to various risks such as theft, fire, and structural failures. These dangers, combined with the emotional turmoil of losing one’s home and possessions, raise a crucial question: are we sufficiently prepared to manage these risks?
Historically, the adoption of insurance in Kenya has been low, largely due to several barriers such as low awareness and concerns about affordability among the population. Many Kenyans have been skeptical about insurance products in general, including home insurance, which has hindered widespread adoption. Recognizing these barriers, insurance companies are actively striving to make home insurance more accessible and raising awareness about its benefits.
One significant effort involves public outreach through media campaigns and direct engagements to educate the population about the importance of home insurance. A recent example is the collaboration between the Association of Kenyan Insurers (AKI) and Mr. Benjamin Mwangangi, the Chief Operations Officer of Occidental Insurance Company Limited, on a home insurance training initiative. The training simplified home insurance for intermediaries, making it easily understandable. At the core of these efforts is the aim to emphasize that insurance serves as a valuable and practical safeguard for protection, rather than a luxury.
Moreover, insurance products are now being customized to meet the specific needs of customers, considering their socioeconomic status. Where policies used to be uniform with little room for customisation, they are now flexible enough to cater to a wide variety of households. This brings all households closer to affordable premiums, convenient payment plans, and customisable coverages. This inclusivity is putting insurance within reach for many.
Technology has played a crucial role in reshaping the insurance sector, bringing greater flexibility to insurers and increased accessibility to customers. Digital platforms and tools have streamlined processes, allowing individuals to easily enroll in and manage their insurance plans. User-friendly mobile apps and online portals have simplified tasks such as policy management, premium payments, and claims submission. Behind the scenes, technologies like AI and big data analytics are transforming the insurance industry by enhancing decision-making capabilities, improving operational efficiency, and delivering personalized customer experiences. Insurers that leverage these technologies effectively can gain a competitive edge, innovate faster, and better meet the evolving needs of their customers in a data-driven world.
Considering the rapid advancements within the industry, the time to act is now. There is substantial evidence indicating that the financial consequences of being unprepared are significant, particularly when coupled with the emotional toll. The insurance industry’s dedication to inclusivity, transparency, and technological progress underscores the importance of stability during challenging periods. This commitment ensures that individuals and businesses can rely on reliable and forward-thinking solutions to navigate uncertainties effectively.
By Nixon Shigoli – Chief Executive Officer – Occidental Insurance Company Limited