Executive Summary
The Insurance Regulatory Authority is a state corporation with the mandate to supervise, regulate and promote development of the insurance industry in Kenya. The Board of Directors of the Authority provides strategic direction towards the achievement of the Authority’s mandate.
The Insurance Regulatory Authority is a state corporation with the mandate to supervise, regulate and promote development of the insurance industry in Kenya. The Board of Directors of the Authority provides strategic direction towards the achievement of the Authority’s mandate.
The Authority’s strategic plan is centered on four key result areas:
i) Regulation and supervision for a safe, fair, competitive and stable insurance market in order to achieve affordable and reliable insurance products
ii) Policy and market development for inclusion and enhanced access to insurance products and services;
iii) Consumer protection and education to enable access to relevant information for informed decision making
iv) Institutional capacity strengthening for efficient and effective delivery of quality service.
Global Outlook
According to Swiss Re Sigma No.3/2019 report, 2018 was a great year for the global insurance industry as global insurance premium volumes for the first time ever surpassed USD 5 trillion mark to reach USD 5.19 trillion. The global insurance industry accounted for more than 6% of the world gross domestic product (GDP) underlining the significant role insurance plays in supporting global sustainable development.
Regional Outlook
In 2018, insurance penetration in Emerging markets in Europe, Middle East and Africa (EMEA) remained relatively low at 1.99% compared to the global insurance penetration at 6.09%. Only four African countries registered real growth in the premium income, these countries include Morocco (8.9%), Nigeria (6.4%), Zimbabwe (3.5%) and South Africa (0.2%).
Local Outlook
Economic growth in 2018 was robust with the economy estimated to have grown at 6.3% compared to 4.9% in 2017. The growth was supported by favorable market conditions, calm political environment and stable inflation.
Kenyan Insurance sector remains relatively stable albeit a marginal growth rate. In 2018, the industry recorded KES 216.26 billion in gross premium (2017: KES 209.00 billion) translating to a nominal growth of 3.5% (-0.5% in real terms). However, the industry net profit declined significantly by 46.7% from KES 13.6 billion to KES 7.3 billion in 2018.
Cyber Risk and Technology Overview
Kenya’s insurance industry is fast adopting technology in the development and distribution of insurance products and services. Technology continues to reduce the cost of doing insurance business by improving efficiency. In addition, the new amendments on direct payment of premium to insurers, is likely to increase stability and liquidity of insurance companies and enhance claim payment.
One of the ways assets are assessed to determine their useful lives and residual values is the asset’s susceptibility and adaptability to changes in technology and processes.
Stakeholder Workshops & Awareness Programs
The Authority carried out a number of workshops and conducted trainings among them, Cyber Crime and Claims Guidelines Workshop, for various stakeholders to enhance understanding of insurance and regulation.
Conclusion
We can see that the Authority is undertaking the above initiatives in relation to technology ensure the insurance industry is stable and customers are satisfied, informed and protected. But, with technology come cyber risks and no industry is immune to cyber attacks.
Insurance companies face fierce competition to offer personalized, seamless experiences at competitive rates while safeguarding customer data. One of the ways insurance companies can ensure security of their systems and customers is by running continuous testing and trainings, and what better way than to hire a team that understands security.
We at Salaam test your security posture through vulnerability assessment and penetration testing. We simulate the actions of a malicious intruder to your systems to ensure that all loopholes are sealed. And thus your organization and clients will be protected and satisfied with your services.