Bima Intermediaries Association of Kenya: Driving Insurance Penetration in Kenya

    Formed in 2014, BIAK is instrumental in addressing the welfare of its members and a champion for best industry practices. Currently recognized as the umbrella body for insurance agents in Kenya, BIAK has over 9000 licensed insurance agents membership spanning over every county. It has changed the narrative of the Insurance penetration in the country.

    Insurance business in Kenya is lucrative but not necessarily a walk in the park. Kenya represents one of Africa’s most formidable and best-developed insurance markets, with good regulation but an almost fragmented sector at the agent level. For a longtime, the industry had two associations to represent the insurance firms and brokers, Association of Kenya Insurers (AKI) and Association of Insurance Brokers of Kenya (AIBK). The welfare of the top two players in the sector (insurers and brokers) was being taken care while agents were left out in the cold.

    In recent years, insurance penetration and accessibility has been improving steadily in Kenya. Kenyans are having more disposable income with the growth of the middle class opening room for more demand for insurance. Key to this growth is the presence of insurance agents who are responsible for over 70 per cent of the insurance premiums in the country.  According to the chairman of the Bima Intermediaries Association of Kenya (BIAK), Mr. Washingtone Ndegea, the insurance premium constitutes sum amount close to Kshs 140 billion.

    Formed in February 2014, BIAK addresses the welfare of its members and promotes best industry practices. This came after the realization that the agents were previously excluded in key decisions and policy making processes for a long time. Their issues were not addressed, and if they were, they were being addressed by bodies that did not understand their welfare.

    Accomplishments

    After its formation, BIAK countered negative proposals when the insurance amendment ACT of 2015 came into force. There were draft proposals leading upto the Insurance Amendment Act of 2015 that did not auger well for the agent, insurance agents were being curtailed from dealing with many insurance firms and were expected to deal with only one company. According to Mr. Ndegea, this presented a big problem. Where would one take other businesses from other insurance firms? In his opinion, that could have affected the overall insurance penetration. Besides, there were also other harmful proposals like reduction of their commissions and forcing them to have a minimum capital requirement of Kshs 5 million; a proposition that would have locked out nearly all players from the industry.

    Washingtone Ndegea, chairman, Bima Intermediaries Association of Kenya

    But the passing of the Insurance Amendment Act of 2015 opened up the playing field for all agents to represent all and any insurance company.

    The association also plays a key role in settling of disputes among its membership and between its members and other stakeholders in the industry.

    To be a member, an agent is required to pay an annual fee of Kshs 3,000 and a monthly subscription fee of Kshs 200. The fees are low to encourage membership growth, says Ndegea.

    BIAK further runs various activities across its calendar year but majorly on sponsorship basis. Of interest are the monthly forums which are held nationally at county level to educate agents and drive insurance awareness among the populace.

    Excellence

    Besides the forums, BIAK also came up with an annual ceremony to award excellence in the industry. “The awards are purely agents driven with the agents nominating a given company in all the classes of awards. This precedes a judging process overseen by independent bodies. We have had KPMG and business writers in the past as some of our judges.”

    The process is transparent and purely driven on excellence with every year’s experience getting better than the previous one. This year, the event is scheduled for November 2nd in a venue outside of Nairobi.

    Despite the association having major plans that it envisioned will champion insurance penetration, Mr. Ndegea is worried at the financial disposition of the association that limits its expansion.  As such, he is calling out for agents to be active members and pay the subscription fees in time. He also looks forward to get funding from the government.

    “Going forward we have major plans to continue increasing awareness about insurance and get into partnerships to train our members to keep tabs with new developments and the industry dynamics. Plans are also underway to curb fraud and do away with rogue agents who have been downplaying the industries’ growth. For a long time, agents named have been tainted with fraud, we want to change that.”

    On the outlook, BIAK champions for innovation and excellence in the industry through best practices.

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