Metropolitan Life, a South African-based insurance company has made plans to invest in local SACCOs in a bid to promote its life insurance products in Kenya. The insurer is a subsidiary of Metropolitan Momentum International, the 3rd largest insurance company in South Africa with assets worth about USD 64 billion (over KES 5.5 trillion)
The firm, which has had a presence in Kenya since 2006, now intends to introduce combined credit life policies for loans borrowed by SACCO members. It has subsidiaries in other parts of the African continent, including Tanzania, Zambia, Nigeria, Ghana, Namibia, Mozambique, Mauritius, Botswana, Lesotho & Swaziland.
According to the Kenya branch CEO, Byford Mutimusakwa, Metropolitan Life controls 1% of the country’s market share within the insurance industry.
He said that the Kenyan insurance sector expects more products and ultimately, more innovation and support. He also noted that Metropolitan Life Kenya is earnestly working to provide that.
Mutimusakwa believes that the Kenyan insurance sector is duty-bound to educate the general public on the particular products and their benefits. He said that it must strive to provide relevant and affordable products and services.
In normal circumstances, loans given to members from a SACCO are guaranteed by the group itself. Problems may arise should some group members find themselves unable to cover expenses in case of a default. In light of this, Metropolitan Life has unveiled the credit life policy to act as collateral for potentially expensive loan defaults.
The firm’s insurance package will offer a cover of 100% for both loans and group shares. Metropolitan Life Corporate Business General Manager, James Oyugi said that the cover is, in fact, a decreasing term assurance. This means that policy holder pay a constant premium for their loan as their shares increase during monthly, quarterly or annual intervals.
Oyugi said that premium rates will be based on the size of the SACCO, its capital and the average age of the group members.
The move follows an announcement by Insurance Regulatory Authority (IRA) CEO, Sammy Makove stating that local policy holders were not satisfied with the current variety of insurance products available in the market. Metropolitan Life intends to help fill that gap while contributing to a projected increase in annual premiums to KES 108.3 billion from 2011’s KES 90.2 billion.