Market Report, "Kenya Insurance Report Q2 2013", published

Key Insights And Key Risks

The Kenya Insurance Report considers the prospects for both life and non-life insurers in the country. As of early 2013, we remain of the view that Kenya's insurance sector is dynamic and resilient. Premiums in both major segments are about 20% higher in 2012 than they were in 2011. Although the insurance companies are small organisations by most standards, they are innovative and clearly understand the needs and challenges of their customers. Initiatives that have been announced in recent months include agricultural risk products that cover farmers against the impact of natural disaster, and facilities to pay premiums via mobile phones, and takaful. Another indicator of the potential for the non-life segment is that Kenya is one of only four countries in Africa (the others being South Africa, Egypt and Uganda) in which global property and casualty insurance giant AIG has an on-the-ground presence. Non-life penetration exceeds 2%, which is a high level for a country with Kenya's low per capita income.

Full Report Details at
- http://www.fastmr.com/prod/589178_kenya_insurance_report_q2_2013.aspx?afid=301

In a country where many households are too poor to consider saving for the future, Kenya's life insurers have still managed to develop a segment that accounts for about a third of all premiums written in the insurance sector as a whole. In other words, they have collectively built sufficient trust among those Kenyans who can save for the long term. Given the country's tendency for high(ish) inflation, this is very much to their credit. Unlike some Eastern European countries, the development of the segment has not been driven entirely by multinational giants. South Africa's Metropolitan Life has a subsidiary in Kenya. Sanlam, another South African major, owns half of Pan Africa. Liberty and Old Mutual are also present. However, local life companies have also been key players in the segment's evolution. Life density is low by many standards but is clearly growing rapidly.

We remain optimistic about the prospects for Kenya's insurance sector, and this is reflected in our projections through to 2017.

Over the last quarter, BMI has made the following changes:

* The analysis incorporates BMI's latest forecasts for Kenya's economy, including details in relation to auto sales and trends in the healthcare sector.
* The analysis incorporates the latest comments on developments from the leading insurers and from the regulator.

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