Business Daily (Nairobi)
Geoffrey Irungu
27 January 2008
Pan Africa Life Insurance is ready to compensate policyholders who may have died in the political violence experienced in parts of the country even as it prepares to roll out nine more branches around the country.
The CEO, Mr Andrew Greenwood, said it had clients in areas hit by the violence and was expecting claims could be filed soon and had already prepared itself for that eventuality.
The branches to be opened will be located in Malindi, Voi, Nyahururu and Naivasha, among others. A branch in Westlands in Nairobi is set to open soon. Already, it has branches in Embu, Meru, Machakos, Thika, Eldoret, Kisumu, Kisii, Nyeri, Nakuru and Mombasa.
As part of its growth strategy, Mr Greenwood said, the company is also interested in group insurance for members of the Armed Forces, stressing that the company's major shareholder, African Life which is south Africa based, had in the past had a similar contract with the Botswana Defence Force.
He said such a contract would normally be in discount terms since the insured members would be many and would be insured as a group. Currently, members of the Kenyan armed forces are insured as individuals.
When armed forces get life insurance, they get some exclusion clauses waived, unlike in other policies targeting civilians which exclude active participation in armed conflict when it comes to compensation.
Thus, underwriters recognise that a member is employed to get actively involved in conflict situations.
Pan Africa Insurance Company becomes the second after Corporative Insurance Company (CIC) to pledge compensation for clients affected by the political conflict that has gripped the country in the past three weeks.
CIC said it would pay for microfinance businesses destroyed or affected by the clashes in various parts of the country.
The company said it had started receiving claims. Even with the expansion plans, for Pan Africa Life, fortunes have changed for the better in recent years. Its total earnings nearly tripled in 2006 compared to 2005, which indicated that there are opportunities for increasing penetration of life insurance in the country.
Total earnings were Sh930.8 million compared to Sh268 million in 2005. The value of new business - value of projected profits arising from new policies sold - at the end of 2006 was Sh164 million, compared to Sh120 million the previous year.
Speaking to Business Daily, Mr Greenwood said that with the low penetration of life insurance, at only 0.77 per cent, showed there were opportunities waiting to be exploited. He said the company would make significant inroads in writing more life business this year.
One of the problems the company faces due to political violence, he said, was insecurity as well as difficult in movement of staff.
He said he had to seek armed security from Eldoret Airport to reach branch offices in the town last week.
The position taken by CIC and Pan Africa Insurance seems to go contrary to that expressed by the insurers' umbrella organisation, which put an advertisement in local newspapers recently declaring that political risks are not insured and that insurers were free to deal with the claims that came to them in the way they deemed fit.
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