Nothing signifies the slumber in the insurance industry like the failure of the regulator to publish an annual report that can help Kenyans understand how it is performing.

An assessment report of the industry for 2006 was not released until this month. Yet the data makes it easier for individuals and corporate bodies to navigate through the path of seeking insurance and assurance against a plethora of risks.

Mr James Kareithi operates from Kirinyaga district where he runs wholesale shops, hotels, real estate letting, and two public service vehicles. He is also a tea farmer.

Mr Kareithi's understanding of insurance does not go beyond his matatus, which, by law, are required to be insured. Otherwise, none of his other businesses or premises are insured. The trader does not even have a life cover, he told Business Daily.

"I have never thought it necessary to have insurance other than for my matatus. In any case, nobody told me why I should insure my shops or buildings," he said in a telephone interview, in what shows the service is still a closed shop for many.

Mr Kareithi represents the dilemma facing the insurance industry and Kenyans in general. On the one hand is an industry that has let the perceived image of elitism cloud it while on the other are individuals exposed to risks because they know little about insurance.

This means in case of a loss or an accident, many can be incapacitated as individuals or businesses.

The obtaining situation defines the amount of work facing the nascent Insurance Regulatory Authority (IRA), which, as is characteristic of any newcomer, shows admirable gusto, releasing a what-to-do list.

Poor management

In April, IRA, which replaced the Commissioner of Insurance, was launched and immediately put as priority the plan to run a major education campaign on the need for insurance as well as take tougher action against cases of indiscipline and poor management.

Incidents of insolvency among public service vehicle underwriters and situations where agents give false information to policy buyers have dented the image of the insurance industry, making potential users of the service to take insurers' words with a pinch of salt.

Steve Omenge, the chairman of the IRA, said the authority would go for risk-based supervision and have a stronger focus on corporate governance and early warning systems in line with international supervisory standards.

"All insurers must meet the capital adequacy levels and the solvency requirements. We shall require insurers to match their capital requirements with their appetite for underwriting risks and with the size and complexity of their business."

Education and working regulations are some of the key challenges facing the authority as it seeks to increase Kenya's current insurance penetration from 3.09 per cent of the gross domestic product (GDP) compared to South Africa's 18.78 per. Life insurance underwriting is even more dismal at 0.18 per cent compared to 15.7 per cent for South Africa.

Just a day before IRA's launch, the Association of Kenya Insurers, the professional body of the industry, was also re-launched with a new logo. AKI chairman, Nelson Kuria, said the new look would help the association "shed its conservative image" that has prevented it from changing with the times.

AKI is equally faced with the challenge of participating in public education to encourage as many people to take insurance policies.

One of the key contributing factors to low uptake of insurance has been high prices of premiums, because of what actuaries say is failure by the industry to capture data to read the industry pace and trends.

Glimmer of hope

However, AKI has developed new data that helped come up with better motor vehicle insurance premiums. Later this month, it will launch a mortality (death) table, a guide to help in calculating premiums for life assurance. A morbidity table that helps calculate medical insurance premium prices is yet to be developed.

Innovations that have been going on at the industry level also give a glimmer of hope to millions of Kenyans who still cannot access insurance services because of cost and misinformation.

In February, the Co-operative Insurance Company (CIC) announced plans to launch a micro-insurance product targeting hawkers.

The CIC product will compensate traders for losses including damages to goods, lost opportunities arising from ill-health and funeral cover in case of death.

"It is about having small clients for big business," said David Rono, CIC's general manager for life and medical scheme. "It helps to end the vicious cycle of poverty experienced by the target group."

The CIC product is billed as a comprehensive package that includes up to Sh100,000 in case of death and a weekly income for two years in case of total disability. The second segment covers funeral expenses of up to Sh30,000 while the third is a medical benefit scheme.

CIC estimates premiums will be in the range of Sh10 and Sh15 a day, between Sh3,650 and Sh5,475 per year, depending on risk evaluation and the extent of benefits sought.

CIC has partnered with the National Hospital Insurance Fund on the medical component, which will provide a family package for in-patient services only in private, government and mission hospitals.

Public-private partnerships have become common in the search for affordable universal healthcare.

For instance, private sector healthcare providers have crafted a new financing plan to make healthcare affordable to millions of Kenyans in the low income bracket.

Promoters of the plan - which has been presented to the Government for approval - say it could reduce the cost of healthcare by up to 40 per cent and ensure that insurance companies do not use their position to exploit low-income earners.

The plan is based on international practices that have been successfully implemented in countries such as South Africa and Botswana.

It involves a commitment from the government to allow parallel importation of generic drugs to reduce the cost of medicine. It is hinged on citizens becoming paid-up members of a hospital in their locality from where they can access health services.

The government has also engaged private sector players in trying to bring back the national hospital insurance scheme that would guarantee free medial care to the poorest of the poor and affordable services to other Kenyans.

The National Health Insurance Fund (NHIF) is partnering with pension schemes to offer comprehensive health insurance covers at subsidised rates to their members. The NHIF cover has no exclusion clause, meaning pensioners aged over 70 years access medical services at the same premiums.

Members pay as low as Sh30 per month and a maximum of Sh320 depending on the nature of risk they want to be covered against.

Local Authorities Pension Trust (Laptrust) and the Kenya Railways Staff Retirement Benefits scheme are some of the members. NHIF says it is approaching associations of informal workers capturing diverse age groups for similar arrangements.

Several companies like Eagle Africa Insurance Brokers and Discovery Health have come up with medial insurance products targeted at senior citizens aged above 60 beginning next January.

The senior citizens' medical product is a major relief to the more than 1.5 million Kenyans who are aged 60 and above and who are given a wide berth by insurance companies because they are regarded as a "high risk" category.

Medical woes for senior citizens are compounded by the group suffering from a higher poverty rate than that of the population - currently at 46 per cent.

Only three per cent of the aged population has a pension income according to the Retirement Benefits Authority (RBA). The national average is 15 per cent.

Further penetration is expected when decision by banks like Equity and Kenya Commercial Bank to start selling insurance products are rolled out later this year. All these developments present the IRA a full in-tray as it begins to work on coming up with better rules for the industry.

The review of the Insurance Act later in the year is also expected to offer the authority and the industry to start on the growth path.