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Transcript

SMEs & Insurance: Closing the Gap · The Mwango Capital Podcast

0:00
Good evening,
0:00
and thank you so much for joining us on our Spaces this
0:03
evening.
0:04
The title of our conversation is What SMEs Really Want from
0:09
Insurance Providers.
0:10
SPEAKER_00: And I'll be hosting James Kamau,
0:12
SPEAKER_00: the Group Head of Distribution at AR Insurance,
0:15
SPEAKER_00: and Kerenia Kibinji,
0:17
SPEAKER_00: Director of Strategy at Wild International.
0:21
SPEAKER_00: My name is Terian Tibet, and I'll be the host of Mwango Spaces tonight.
0:25
SPEAKER_00: Just a brief introduction.
0:28
of the topic and the aim of this space is we aim to unpack the
0:32
realities behind low
0:34
insurance uptake among SMEs in Kenya and explore how providers
0:38
and the ecosystem as
0:40
SPEAKER_00: a whole can better align insurance solutions with their real needs.
0:44
SPEAKER_00: A little bit about our host, Mwango Capital.
0:47
Mwango is a research company that leverages digital media to
0:51
share information on
0:52
SPEAKER_00: East Africa's financial markets.
0:54
Mwango seeks to inform investors about what organizations and
0:58
farms do to help them
0:59
SPEAKER_00: digest company financials and business news.
1:03
SPEAKER_00: Of course,
1:03
SPEAKER_00: this is done through rigorous research and high-quality productions,
1:07
SPEAKER_00: as well as narratives that are based on facts,
1:10
SPEAKER_00: and opinions from experts.
1:12
SPEAKER_00: In addition,
1:13
Mwango sends out a newsletter that's called the Mwango Weekly
1:16
every Monday and as
1:18
SPEAKER_00: well as hosts Mwango Spaces Tuesday,
1:20
SPEAKER_00: Friday,
1:22
SPEAKER_00: and also send out Mwango memes every Saturday.
1:25
SPEAKER_00: So if you don't already follow those hashtags, please do.
1:28
And also follow at Mwango Capital here on Twitter and on other
1:33
social media spaces as well.
1:36
SPEAKER_00: I'd like to welcome James,
1:38
SPEAKER_00: the Group Head of Distribution at Our Insurance,
1:41
to tell us a little bit about what you're looking forward to
1:44
this evening and just
1:46
a quick overview of what we can expect from you as an insurance
1:50
player in the SME
1:51
SPEAKER_00: space.
1:52
SPEAKER_00: James, let's start with you and then we'll go to Kedenji.
1:55
SPEAKER_01: Good evening, everyone.
1:56
SPEAKER_01: Thank you, Rianne.
1:58
SPEAKER_01: Thank you for the invite, Mwango Capital.
2:01
SPEAKER_01: It's an honor to be here once again.
2:03
SPEAKER_01: My name is James.
2:04
SPEAKER_01: I serve as the group head distribution at AR.
2:08
SPEAKER_01: AR is a leading insurance provider in East Africa.
2:13
We do both health and gender insurance,
2:16
and we lead especially on the health side.
2:20
SPEAKER_01: We have quite a bit of experience in dealing with SMEs,
2:24
SPEAKER_01: and as we hold this discussion here this evening,
2:27
SPEAKER_01: we are actually the leaders in SME insurance within the region.
2:33
We have quite a lot of experience that we would like to share
2:36
with the listeners this evening.
2:38
We also would like to hear their feedback and the contribution
2:42
of everyone here.
2:44
As long as we are increasing insurance penetration,
2:47
we are always happy to participate.
2:51
SPEAKER_00: Kedenji, we'll come to you now.
2:53
Just some few opening remarks and perhaps you can tell us a
2:56
little bit about the
2:57
SPEAKER_00: report that has informed our conversation this evening.
3:00
SPEAKER_02: Thank you very much, Terian.
3:02
SPEAKER_02: My name is Kirinyo Kithenji.
3:04
SPEAKER_02: I serve as consulting director at Wild International.
3:07
So Wild International is a management consulting firm that
3:11
pretty much works with
3:12
SPEAKER_02: small and medium enterprises,
3:13
SPEAKER_02: especially the ones that are owner managed.
3:15
SPEAKER_02: We've been around for about 21 years.
3:17
SPEAKER_02: working with SMEs,
3:19
SPEAKER_02: especially in the area of strategy,
3:20
SPEAKER_02: although there are other interventions that we have.
3:23
SPEAKER_02: Basically, we publish these reports every year.
3:26
SPEAKER_02: And last year we chose to focus on insurance,
3:29
but really the focus is usually about how the SMEs interface
3:33
with third party
3:34
SPEAKER_02: suppliers,
3:34
SPEAKER_02: like insurance companies,
3:36
SPEAKER_02: even done a report on access to finance.
3:39
SPEAKER_02: and maybe as strategies.
3:40
So the SME sits at the center of the report and we're really
3:44
glad that we're able
3:45
SPEAKER_02: to collaborate with AAR in this conversation.
3:49
We'll now get into the meat of the conversation and James will
3:52
start with you.
3:53
SPEAKER_00: According to the reports that both of you have alluded to,
3:56
SPEAKER_00: 53% of SMEs do not have any insurance cover.
4:02
Tell us,
4:02
what does this reveal about the current state of SME insurance
4:06
in Kenya?
4:07
Indeed,
4:07
it is quite concerning that 53% of SMEs do not have any
4:13
insurance cover.
4:15
SPEAKER_01: And this means that billions in terms of value assets remain unprotected.
4:21
SPEAKER_01: And in the wake of any adversity,
4:24
SPEAKER_01: the losses would really be huge and direct to the owners themselves.
4:29
SPEAKER_01: It also looks very worrying because all the reporting seniorities that
4:34
A whole 53% of the entrepreneurs have not even protected
4:38
themselves in terms of health.
4:41
SPEAKER_01: Now,
4:41
SPEAKER_01: the question begs as to why this situation would be,
4:45
and the first factor that I would place this on would be the
4:49
low-level awareness.
4:52
SPEAKER_01: We have embarked on various campaigns to create awareness amongst SMEs.
4:57
Interestingly enough,
4:58
on a daily basis,
4:58
we deal with quite a number of SMEs.
5:01
And these are the intermediaries that sell on our behalf
5:04
because they fall under
5:05
SPEAKER_01: the category of MSMEs.
5:08
SPEAKER_01: And the next thing is affordability.
5:10
We are continuously looking at lowering the cost of accessing
5:15
quality insurance,
5:17
SPEAKER_01: both the general and health.
5:19
SPEAKER_01: And the third is accessibility,
5:21
SPEAKER_01: where you may be desirous to buy insurance,
5:24
SPEAKER_01: but you do not know where to source it from.
5:27
I want to inform this gathering that at AR,
5:30
we have a diverse range of distributors.
5:34
SPEAKER_01: We have about 2,000 agents.
5:37
SPEAKER_01: We deal with about 200 brokers.
5:39
SPEAKER_01: We deal with most major banks.
5:42
SPEAKER_01: You can actually walk into any bank branch and request for our insurance.
5:47
SPEAKER_01: And there is an increasing participation by various InsureTechs,
5:52
SPEAKER_01: whom we have also partnered with.
5:55
SPEAKER_01: The fourth factor will be relatability.
5:58
Do the MSMEs relate with the solutions that are out there in
6:03
the market that would
6:04
SPEAKER_01: actually be creating a gap?
6:06
where they don't see it as a real solution to any adversity
6:10
that may come to them.
6:12
So what we are trying to do ourselves is to listen and craft
6:16
solutions from a
6:17
SPEAKER_01: listening point of view.
6:18
SPEAKER_01: We have very many forums with SMEs where we do a lot of listening.
6:23
SPEAKER_01: We do carry out our customer service index.
6:27
SPEAKER_01: So there's quite a bit of feedback that we receive and craft solutions.
6:31
SPEAKER_01: based on that feedback.
6:33
The fourth and the fifth and the last is attitudes towards
6:37
insurance by the SMEs.
6:39
SPEAKER_01: There are other traditional methods of mitigating when you choose well.
6:45
And some of these traditional methods may include coming
6:49
together in Chamas as
6:52
SPEAKER_01: SMEs,
6:53
SPEAKER_01: and whenever something happens,
6:54
SPEAKER_01: we come together.
6:55
SPEAKER_01: We speak of Harambe, and we assist a member.
6:59
SPEAKER_01: We go for circle loans.
7:01
SPEAKER_01: Sometimes we even pray about it and hope that really nothing happens.
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SPEAKER_01: And that relates to the first point that I made.
7:08
It's all about now creating awareness so that more and more
7:13
SMEs come on board and
7:15
SPEAKER_01: we don't leave a lot of assets unprotected.
7:19
SPEAKER_01: We don't expose entrepreneurs who hide bills should they fall in sync.
7:24
SPEAKER_00: Thank you so much,
7:25
SPEAKER_00: James,
7:25
for quite an in-depth overview of what the space looks like and
7:28
what the challenges
7:29
SPEAKER_00: could be or the pain points.
7:31
SPEAKER_00: And also for pointing out that sometimes we just resort to prayer.
7:35
SPEAKER_00: But hopefully by the end of this conversation,
7:37
we'll be able to bring the nexus and share with us some of the
7:41
solutions that are
7:42
SPEAKER_00: available for small businesses.
7:45
SPEAKER_00: Kevinji, let's come to you now.
7:46
This report offers quite a rare and data-reached lens into the
7:52
insurance behaviour
7:53
SPEAKER_00: of SMEs in East Africa.
7:55
SPEAKER_00: What gaps in the SME sector inspired WILD to take on this research?
8:01
SPEAKER_02: I'd like to say that I work with SMEs,
8:03
SPEAKER_02: especially the ones that are owner-managed,
8:05
SPEAKER_02: where the owners are both owners and managers,
8:07
SPEAKER_02: spans over 20 years.
8:09
SPEAKER_02: And then because of this,
8:10
SPEAKER_02: of course,
8:11
we've observed and we keep observing a number of gaps with the
8:15
SMEs that we work
8:16
SPEAKER_02: with.
8:17
SPEAKER_02: So these reports,
8:18
SPEAKER_02: like I alluded to earlier,
8:20
SPEAKER_02: have always been SME-focused,
8:22
which in a sense means that we publish such reports from the
8:25
perspective of the
8:26
SPEAKER_02: SMEs.
8:27
SPEAKER_02: And there's a report coming out every year on some topic or the others.
8:31
So the report that we are discussing today takes the standpoint
8:35
of the relationship
8:35
SPEAKER_02: between the SMEs and the insurance industry.
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SPEAKER_02: In other words,
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we really just wanted to know what do SMEs think about
8:43
insurance and not what
8:45
SPEAKER_02: insurers think about SMEs.
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SPEAKER_02: So it's pretty much we are taking the standpoint of SMEs.
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SPEAKER_02: So we also know that SMEs must necessarily work with partners,
8:53
SPEAKER_02: external partners to succeed in what they do.
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SPEAKER_02: And these partners,
8:56
SPEAKER_02: of course,
8:56
can be businesses like themselves or they can be government or
9:00
even other partners.
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We always think it is good to occasionally ask the SMEs what
9:05
they think about those
9:06
SPEAKER_02: partners that they work with that are necessary for the success of the
9:10
SPEAKER_02: organizations alongside many other issues or gaps that they face.
9:14
SPEAKER_02: So this report, of course, is the fourth one.
9:17
SPEAKER_02: And the first was on strategy.
9:19
SPEAKER_02: And then we've also done a report on access to finance.
9:22
SPEAKER_02: And then before, in 2023, we did one on retirement planning.
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SPEAKER_02: Just to summarize, what we're trying to say is...
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SPEAKER_02: In the course of working with SMEs for over 20 years,
9:32
SPEAKER_02: of course,
9:32
we've noticed certain patterns and certain things that matter
9:34
to them and certain
9:36
SPEAKER_02: gaps that matter to them.
9:38
SPEAKER_02: And now speaking of a report in particular,
9:40
we think of these reports as a service that we render to SMEs
9:43
so they can make
9:44
SPEAKER_02: better decisions when they're working with certain partners.
9:47
And also when they are taking a look at themselves in front of
9:50
a mirror to see,
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SPEAKER_02: I think we have this or this or these defects.
9:53
Just to confirm or to summarize rather that these are gaps that
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we notice as we
9:58
SPEAKER_02: work day to day with SMEs.
10:01
SPEAKER_00: Thank you so much, Ketenji, for painting that picture for us.
10:05
SPEAKER_00: James, I'll come back to you.
10:06
SPEAKER_00: Now,
10:07
SPEAKER_00: while 77% of insured SMEs feel that their coverage is adequate,
10:12
SPEAKER_00: the report also highlights a lack of understanding of available insurance
10:17
SPEAKER_00: solutions.
10:18
So how do you balance perceived adequacy with a need for deeper
10:22
education and awareness?
10:25
SPEAKER_01: Terian,
10:25
it's quite true that while that number of SMEs may feel
10:30
adequately covered,
10:32
SPEAKER_01: the need for them to understand the solutions even better.
10:37
What I would say is that we really need to be intentional in
10:41
terms of taking our
10:42
SPEAKER_01: message to the SMEs.
10:45
At AAR,
10:45
what we are trying to do at every instance,
10:48
we have budgeted for it.
10:50
SPEAKER_01: and created the right partnerships,
10:53
SPEAKER_01: such as with the Wild and Sandbox and even other organizations.
10:59
SPEAKER_01: So we always have forums with SMEs.
11:02
A month hardly passes before we sit down with SMEs and exchange
11:07
ideas and listen to
11:09
SPEAKER_01: them as we pass on the message of insurance.
11:13
SPEAKER_01: The other thing that we try to do, actually,
11:17
Part of what we do,
11:18
it's part of our product offering is member education.
11:21
SPEAKER_01: So for every FME that we ensure,
11:24
SPEAKER_01: we intentionally arrange various sessions with,
11:28
SPEAKER_01: say,
11:28
the employees of that organization so that they can be able to
11:32
understand what they
11:33
SPEAKER_01: cover.
11:35
SPEAKER_01: entails and the benefits, the do's and don'ts of the coming.
11:40
SPEAKER_01: What we try to do at AR is not to be prescriptive.
11:44
SPEAKER_01: Even in the process of product design,
11:47
we collaborate as much as possible with various stakeholders so
11:52
that the product
11:53
SPEAKER_01: that comes off is appreciated by the various stakeholders.
11:59
SPEAKER_01: Our current SME solution has gained a lot of popularity.
12:03
It's well consumed by the market and it's actually one of our
12:08
fastest growing lines
12:10
SPEAKER_01: at the moment.
12:11
SPEAKER_01: We have invested in empowering our intermediaries through training,
12:16
SPEAKER_01: we do through our marketing.
12:18
We do a lot of product campaigns where people are able to
12:22
interact with our
12:23
SPEAKER_01: messages and they can raise queries and what a few.
12:27
SPEAKER_01: But even as I conclude,
12:28
let me mention that the language that we use is quite important
12:32
so that we avoid
12:34
highly technical language and process it and make it as simple
12:39
as possible to
12:40
SPEAKER_01: understand.
12:41
SPEAKER_01: If you notice our billboards now, which...
12:44
SPEAKER_01: and within Nairobi in different locations.
12:48
We've tried to come to the level of SMEs using language that is
12:53
easily identifiable
12:55
SPEAKER_01: by especially young upcoming entrepreneurs.
12:59
SPEAKER_00: All right.
12:59
SPEAKER_00: Thank you so much, James.
13:00
SPEAKER_00: And of course, we have seen some of the billboards you're talking about.
13:05
SPEAKER_00: And it is,
13:05
SPEAKER_00: as you say,
13:06
SPEAKER_00: an important factor to ensure that the language that you use and how you
13:11
communicate to entrepreneurs is in a language that they
13:14
understand and identify
13:15
SPEAKER_00: with.
13:15
SPEAKER_00: So thank you so much for sharing.
13:17
SPEAKER_00: Kethenji, I'll come to you now.
13:19
Based on your experience in supporting SMEs and you've given us
13:22
a bit of a
13:22
SPEAKER_00: background to WILD and how you work with SMEs,
13:25
how would you describe the mindset of today's entrepreneur when
13:29
it comes to
13:30
SPEAKER_00: preparing for risk?
13:32
SPEAKER_02: Generally,
13:33
SPEAKER_02: there is still plenty of room for taking the matter of risk seriously,
13:37
and especially how we choose to manage those risks at the
13:40
enterprise level.
13:41
SPEAKER_02: But I'd say,
13:42
SPEAKER_02: I think SMEs tend to think of risk in a very narrow sense,
13:46
SPEAKER_02: in the sense of actual loss.
13:48
SPEAKER_02: For instance, I'm going to give you an example.
13:49
Maybe you're a dairy farmer and you're thinking,
13:52
what will happen if I lose my cows?
13:55
SPEAKER_02: maybe because of flooding or lack of pasture or something like that.
13:59
SPEAKER_02: But the other thing about risk that is forgotten,
14:01
SPEAKER_02: and maybe that's a big one,
14:02
SPEAKER_02: is a loss of opportunity.
14:04
SPEAKER_02: So there's an actual loss.
14:06
SPEAKER_02: I've lost my cattle, for instance.
14:08
SPEAKER_02: I've lost my dairy cows.
14:09
SPEAKER_02: But there's also a loss of opportunity.
14:11
SPEAKER_02: That's always a risk when it comes to SMEs.
14:15
SPEAKER_02: And we have to think about that as more often.
14:17
And we could do a lot better as SMEs to think about the
14:20
opportunities that we are
14:21
SPEAKER_02: losing,
14:21
SPEAKER_02: not just in terms of the losses that we may incur.
14:25
SPEAKER_02: For instance,
14:25
SPEAKER_02: in that example of a dairy farmer,
14:27
what if the dairy farmer is unable to take advantage of a huge
14:31
price in market
14:32
SPEAKER_02: demand because he didn't know about it.
14:34
SPEAKER_02: So there's a loss of opportunity side of it.
14:37
SPEAKER_02: And then there's the loss that we are familiar with.
14:39
But I also think it's important to take into account that once
14:42
you decide to set up
14:44
SPEAKER_02: a business,
14:44
SPEAKER_02: and this is an important point,
14:46
SPEAKER_02: you're already stepping into the space of risk.
14:48
The other way to put it really is a decision to go into
14:51
business is also by default
14:53
SPEAKER_02: a decision to take certain risks.
14:55
And I would say this,
14:57
a typical SME is both a bundle of risks and a bundle of
15:00
opportunity.
15:01
SPEAKER_02: A typical SME is both a bundle of risks and a bundle of opportunity.
15:05
SPEAKER_02: Now,
15:05
SPEAKER_02: if that is true,
15:06
then the difference in approach to risk becomes whether you are
15:10
aware of the risks
15:11
SPEAKER_02: that we face as an SME,
15:12
SPEAKER_02: whether you're exposed to those risks,
15:14
SPEAKER_02: whether you're vulnerable to those risks.
15:17
SPEAKER_02: People ask me, what's the difference between exposure and vulnerability?
15:21
Exposure simply means that the risk has come to your doorstep,
15:23
so to speak.
15:25
SPEAKER_02: But vulnerability is different.
15:26
SPEAKER_02: It's come to your doorstep, but maybe your door was not opened.
15:29
SPEAKER_02: Your door was open or you forgot to lock your door.
15:32
SPEAKER_02: So are you exposed to the risk?
15:34
SPEAKER_02: Are you vulnerable?
15:36
SPEAKER_02: And then of course,
15:37
SPEAKER_02: Do you even think about the impact when the risks materialize?
15:40
SPEAKER_02: And of course, my colleague James has alluded to that.
15:43
SPEAKER_02: I want to say this from my experience,
15:46
SPEAKER_02: he noted that if you're running an SME,
15:47
the first port of call should be to establish the risks that
15:51
are inherent in your
15:52
SPEAKER_02: business model itself.
15:53
Like we said,
15:54
an SME is a bundle of opportunity and it's also a bundle of
15:58
risks.
15:58
SPEAKER_02: So are you aware of those risks?
16:00
So your first part of call when it comes to risk management for
16:03
your business as an
16:04
SME owner is to think that the risk that I'm exposed to just
16:08
because I'm running
16:09
SPEAKER_02: this particular business model.
16:11
SPEAKER_02: Anything can go wrong as far as the business model is concerned.
16:14
SPEAKER_02: Maybe you can make a mistake around the needs that you're serving,
16:18
SPEAKER_02: around the clients that you're serving.
16:20
SPEAKER_02: You can make a mistake on your value proposition.
16:22
You can make even a mistake on what it will take to deliver the
16:25
value proposition.
16:26
SPEAKER_02: So you can see.
16:27
SPEAKER_02: Then,
16:28
SPEAKER_02: of course,
16:28
SPEAKER_02: there are other things that you don't have control about,
16:30
SPEAKER_02: like pandemics,
16:32
SPEAKER_02: low costs,
16:32
SPEAKER_02: and things like that.
16:34
SPEAKER_02: So I have one more point to make.
16:35
SPEAKER_02: From where we sit as an entrepreneurship support organization,
16:39
we have also seen that the owners of the SMEs can be the
16:42
biggest source of risk by
16:44
SPEAKER_02: the kind of positions they make or they fail to make.
16:47
SPEAKER_02: So maybe before we look at their businesses as a source of risk,
16:50
SPEAKER_02: we may also want to look at the owners,
16:53
SPEAKER_02: especially how they make decisions in their businesses.
16:56
SPEAKER_02: Now,
16:56
our experience of working in SMEs is owner managers or owners
17:00
of SMEs don't usually
17:02
SPEAKER_02: make decisions based on data.
17:04
SPEAKER_02: They make decisions based on rules of thumb, trial and error.
17:08
SPEAKER_02: And of course, in the extreme cases, error and error.
17:10
SPEAKER_02: So how they make decisions.
17:12
Now,
17:12
that decision-making process and how they make decisions can be
17:15
a huge source of risk.
17:17
SPEAKER_02: So we are saying your business can be a huge source of risk.
17:19
SPEAKER_02: It will get certain things wrong.
17:21
SPEAKER_02: And also how you make decisions can be a huge source of risk.
17:25
SPEAKER_02: And then on top of that,
17:26
SPEAKER_02: outside of yourself as a business owner and outside of your business,
17:29
SPEAKER_02: the one that you're running,
17:31
there are also things like pandemics and locust and flooding
17:33
and things like that.
17:35
The other thing that I think I need to mention before I
17:37
conclude is that it's
17:39
important to know what the SNA owner decides to do once he's
17:44
fully aware of the
17:45
SPEAKER_02: risks that he's going through.
17:47
So I'm talking about how they choose to manage risks that
17:50
they're aware of.
17:51
SPEAKER_02: I'll give you an example in conclusion.
17:54
SPEAKER_02: As I conclude, I'll give you an example.
17:56
It's a well-known fact that the chances of being involved in an
18:00
accident when
18:00
you're driving increase five times when you're talking on your
18:04
mobile as you drive.
18:06
The chances of being involved in an accident increase five
18:09
times if you talk on
18:10
SPEAKER_02: your phone as you drive.
18:11
SPEAKER_02: Now, here's what I want to say.
18:13
We observe a lot of those behaviors as we move about our
18:17
business up and down in
18:19
SPEAKER_02: our Kenyan roads.
18:20
SPEAKER_02: Now, those same guys are the ones who are running enterprises.
18:24
SPEAKER_02: What do you think they think about risks?
18:26
SPEAKER_00: Oh, wow.
18:27
SPEAKER_00: Quite some challenges to us there.
18:29
SPEAKER_00: Thank you so much for sharing that.
18:31
SPEAKER_00: I'll come to James now.
18:33
SPEAKER_00: With costs cited as the biggest barrier to uptake,
18:38
how is our insurance working to design and deliver insurance
18:42
solutions that
18:43
specifically meet SMEs where they are without compromising
18:47
value or sustainability?
18:50
SPEAKER_01: We are in the year that we are marking, 40 years since we were finding.
18:54
SPEAKER_01: We have collected a lot of data with time.
18:58
SPEAKER_01: We can actually tell the various trends, say, of various diseases.
19:03
We have the average costs of various costs related to various
19:08
diseases in hospitals.
19:10
SPEAKER_01: So...
19:11
SPEAKER_01: We have our own internal data, which we have collected over time.
19:14
SPEAKER_01: However, we've been strengthened that further by doing a lot of research.
19:20
We have partnered with one of the largest research
19:23
organizations in the world to
19:25
SPEAKER_01: support us with the real situation on the ground.
19:29
SPEAKER_01: There's a product that is quite popular in the market today.
19:33
And we did a lot of research actually going almost to a whole
19:37
year before we launched it.
19:39
And when we did,
19:40
there was little surprise because it met the expectations of
19:44
the market.
19:45
SPEAKER_01: So indeed,
19:46
value is important to the customer and sustainability is also
19:50
very important
19:51
because it's one thing deriving customer value and another for
19:56
us to be able to
19:56
SPEAKER_01: sustain the same level of benefits at that particular cost.
20:02
SPEAKER_01: But also another aspect of cost is now how we pay.
20:07
SPEAKER_01: And the law prescribes that we do cash and card.
20:12
That means that if you require insurance,
20:16
you will be given a quotation,
20:18
for example.
20:19
SPEAKER_01: And if the quote comes to $10,000, you need to pay that $10,000.
20:23
SPEAKER_01: you to derive the benefits.
20:25
SPEAKER_01: However,
20:25
there are always ways that are innovated so that we can be able
20:30
to make payment of
20:31
SPEAKER_01: insurance a little bit softer.
20:34
SPEAKER_01: So one of the ways is insurance premium financing.
20:38
SPEAKER_01: Today you can easily walk to your bank
20:41
SPEAKER_01: and arrange or financing of your insurance premiums.
20:46
SPEAKER_01: For example,
20:47
SPEAKER_01: that 10,000 shillings,
20:48
SPEAKER_01: you can now be able to pay in installments at a little interest.
20:55
SPEAKER_01: Now,
20:55
our challenge to the banks is to make this more flexible
20:58
because they should be
21:00
able to increase the number of installments and probably even
21:04
relook at the
21:05
SPEAKER_01: interest given the high need for insurance.
21:10
SPEAKER_01: The second,
21:11
SPEAKER_01: and this is what we do at AAR,
21:13
SPEAKER_01: based on a customer's credit history,
21:16
SPEAKER_01: we are able to allow,
21:17
SPEAKER_01: say,
21:19
SPEAKER_01: two installments in the same month.
21:22
SPEAKER_01: And just depending on negotiations, it can go a little longer.
21:26
SPEAKER_01: But that is basically based on a customer's credit history.
21:31
We are aware that some religions do not allow payment of
21:36
interest,
21:37
so to speak.
21:38
So we are also oblivious of such instances and we listen and we
21:44
are able to give
21:45
SPEAKER_01: good consideration.
21:47
SPEAKER_01: In terms of the modalities of how this payment is done,
21:51
SPEAKER_01: We have digital payments,
21:53
which makes it very convenient for you to be able to pay from
21:57
wherever you are.
21:59
SPEAKER_01: And just as a last point,
22:01
the issue of payment is so serious that we are even now
22:05
beginning to look at some
22:06
in-house solution where we have some partners whom we are
22:10
discussing how we can be
22:12
able to dispense those premiums on behalf of our customers at
22:16
an affordable,
22:17
SPEAKER_01: very low interest and favorable installments.
22:22
SPEAKER_01: SMEs are very interesting.
22:24
SPEAKER_01: They are SMEs that derive their incomes daily.
22:27
SPEAKER_01: They are those that would like to pay weekly.
22:30
They are those that would like to pay monthly,
22:33
biannually or even annually.
22:35
So we really need,
22:36
and I'm saying here there is room for improvement on our path.
22:40
We really need to sit and look at what is convenient for
22:44
particular SMEs.
22:45
So it's a work in progress in as far as bringing convenience or
22:50
payment is
22:50
SPEAKER_01: concerned,
22:51
but there is a way out in terms of the various methods that
22:56
I've shared with you.
22:58
SPEAKER_00: Angie, I'll now come to you on our next question.
23:01
SPEAKER_00: Access to finance clearly remains a key challenge for SMEs.
23:06
SPEAKER_00: How can insurance be better integrated into financial literacy and
23:11
SPEAKER_00: capacity-building conversations to strengthen the resilience of SMEs?
23:15
Especially because even as we've had this conversation from the
23:19
beginning,
23:19
there was a point that was raised about either the lack of
23:22
awareness of what's in
23:24
SPEAKER_00: the market,
23:25
or just the lack of financial literacy for some of the founders
23:29
or owners of businesses.
23:32
SPEAKER_02: Thanks, Terian.
23:33
SPEAKER_02: On my part,
23:34
I think that the fact that discussions about insurance are
23:38
generally excluded from
23:39
SPEAKER_02: financial literacy capacity building sessions is a bit telling.
23:44
I think it kind of speaks to the general attitude that thinking
23:47
about risks is a
23:48
preserve of credit officers in banks or maybe the underwriting
23:52
teams in the
23:53
SPEAKER_02: insurance companies like my colleague James.
23:56
SPEAKER_02: It's all they are preserved.
23:57
But like I said earlier,
23:59
an SME is both a bundle of risks and a bundle of opportunity.
24:04
SPEAKER_02: And given that the SME owner can be the biggest source of risk,
24:08
SPEAKER_02: my question is,
24:10
shouldn't we take education or awareness about risks a lot more
24:15
seriously?
24:16
And shouldn't we work a lot harder to mainstream the idea of
24:20
risk management to all SMEs?
24:22
SPEAKER_02: Now,
24:23
SPEAKER_02: I have this to say,
24:24
SPEAKER_02: even if the SME chooses to manage their risks without taking insurance,
24:28
SPEAKER_02: because some of them,
24:28
SPEAKER_02: of course,
24:29
SPEAKER_02: will do that,
24:29
SPEAKER_02: because I think there are basically four ways of managing risk.
24:33
SPEAKER_02: Once you're aware about risk,
24:34
SPEAKER_02: assuming that you're aware about the risk,
24:35
SPEAKER_02: you can decide to accept the risk and live with it.
24:38
SPEAKER_02: You can choose to avoid the risk.
24:40
You can choose to reduce the risk,
24:42
or you can choose to transfer the risk.
24:44
SPEAKER_02: That's where the insurance companies like AAR are coming.
24:48
SPEAKER_02: Insurance, of course, is a risk transfer mechanism.
24:51
So what I'm saying is even if they choose to manage their risk
24:53
without taking
24:54
SPEAKER_02: insurance,
24:55
SPEAKER_02: they still need to know,
24:56
or they still need to have a way of being aware that we are
24:59
exposed to these risks.
25:01
And they also need to know the best mechanism of dealing with
25:04
those risks.
25:05
SPEAKER_02: Maybe you've accepted a risk that you should have transferred,
25:08
SPEAKER_02: or maybe you've transferred a risk that you'd have accepted.
25:12
SPEAKER_02: So yes, any intervention that helps SMEs to manage risks is good.
25:17
And I think banks and insurance businesses should take the lead
25:22
in driving this
25:23
SPEAKER_02: because risk management is also their core business.
25:26
SPEAKER_02: They have a lot of experience in that.
25:28
And that knowledge transfer can easily be transferred to the
25:31
SMEs that they serve.
25:33
SPEAKER_02: That I think is a conversation to be had.
25:35
SPEAKER_02: Terian.
25:37
SPEAKER_00: Thank you so much.
25:38
SPEAKER_00: And you do point out some really incredible points.
25:41
I hope within the room we've got stakeholders within the
25:44
ecosystem who can begin to
25:46
SPEAKER_00: make changes on that.
25:47
SPEAKER_00: So thank you so much.
25:49
SPEAKER_00: James, we'll come to you now.
25:51
The data shows that 59% of SMEs are not considering any new
25:57
insurance in the near future.
25:58
SPEAKER_00: That's quite some bleak prediction there.
26:01
What insights can you draw from this hesitancy and what shifts
26:05
are needed to
26:05
SPEAKER_00: reframe insurance as a growth enabler rather than a cost?
26:11
This is indeed a big concern and it speaks a lot to awareness
26:17
like we have spoken about.
26:19
SPEAKER_01: It speaks maybe to affordability.
26:23
SPEAKER_01: I'm here asking myself a few questions.
26:26
The first is,
26:27
are they deriving any value from their existing insurance
26:31
products?
26:33
SPEAKER_01: What is their current experience?
26:35
It
26:36
SPEAKER_01: Very important for us to be able to measure that.
26:39
And there we have the customer satisfaction or service index
26:43
that we do on a
26:44
quarterly basis that really informs us where our customers
26:49
really are in terms of
26:50
SPEAKER_01: the experience that they are having.
26:53
And this has given us an opportunity actually to do
26:56
cross-selling of products to our customers.
26:59
For example,
27:00
we are seeing an increasing uptick of our personal accident
27:05
covers.
27:07
More concerning is that the SMEs appear not to be too aware
27:13
about the kind of risks
27:15
SPEAKER_01: that businesses are exposed to.
27:18
SPEAKER_01: And if I can cite a few examples,
27:20
we have political violence and terrorism covers that comes in
27:25
very handy whenever
27:26
SPEAKER_01: we have these political activities and even terrorism when it comes.
27:31
SPEAKER_01: And those things can be defining.
27:34
SPEAKER_01: They can actually bring down a business.
27:37
SPEAKER_01: that has been built over the years.
27:40
Insurance is also a very good way of cushioning inflation and
27:45
rising costs.
27:46
SPEAKER_01: And I want to explain that a little.
27:49
SPEAKER_01: If you buy a medical scheme today worth 20,000 shillings,
27:52
SPEAKER_01: whatever changes go on in the hospitals,
27:55
SPEAKER_01: whatever prices are changing there,
27:57
you are not affected because you paid your premium at the
28:00
beginning of the term.
28:03
SPEAKER_01: So there will be no change.
28:05
SPEAKER_01: Insurance cushions against inflation, against rising costs.
28:10
SPEAKER_01: We have a lot of social things that come to us.
28:14
SPEAKER_01: Thickness is real.
28:16
SPEAKER_01: There are new and emerging diseases.
28:18
SPEAKER_01: We have cancer coming up and even other more complex diseases,
28:22
SPEAKER_01: which we are increasingly putting under coverage.
28:26
SPEAKER_01: Right?
28:26
SPEAKER_01: And where it's not directly covered,
28:29
SPEAKER_01: especially as a corporate or as an ATM,
28:31
SPEAKER_01: you can even negotiate and have those new and emerging diseases covered.
28:37
SPEAKER_01: It gives you the peace of mind knowing that whatever happens,
28:41
SPEAKER_01: My dignity is preserved.
28:43
SPEAKER_01: My privacy is also preserved.
28:46
SPEAKER_01: I can go to hospital in my own privacy.
28:50
SPEAKER_01: So, very key.
28:52
SPEAKER_01: What about cyber risks?
28:54
These days,
28:55
we are living where there are so many cyber risks and we have
28:59
now those solutions.
29:01
that can be able to cover you in the event of any cyber risk
29:06
coming your way.
29:07
SPEAKER_01: As we speak right now,
29:08
there are weather warnings along the coast where we have been
29:12
told that even the
29:13
SPEAKER_01: beaches,
29:14
SPEAKER_01: I think,
29:14
SPEAKER_01: are closed because there are strong winds that are anticipated,
29:18
SPEAKER_01: storms and what have you.
29:20
SPEAKER_01: Imagine those businesses along the coastline.
29:22
SPEAKER_01: What year?
29:23
SPEAKER_01: They were all insured,
29:25
SPEAKER_01: knowing very well that even in terms of weather extreme,
29:30
SPEAKER_01: that the business is well taken care of.
29:32
SPEAKER_01: India,
29:33
SPEAKER_01: a few months ago,
29:34
SPEAKER_01: we had floods in this country,
29:37
SPEAKER_01: and they wrecked havoc to a lot of households and businesses.
29:42
SPEAKER_01: Occasionally, we have our droughts.
29:44
SPEAKER_01: We have seen wildfires in different parts of the world.
29:48
SPEAKER_01: Let's protect these risks.
29:50
SPEAKER_01: It can be done.
29:52
We don't need to be too worried about what we are going to do
29:56
if these risks come
29:58
SPEAKER_01: to our business.
29:59
SPEAKER_01: Let's cover them.
30:01
SPEAKER_01: In today's world,
30:02
we are seeing an increasing level of people going to court over
30:07
various issues.
30:08
SPEAKER_01: So we call that liability classes.
30:12
SPEAKER_01: And I want to give you a very practical example of what the law says.
30:16
The law says that if an employee is injured or dies,
30:21
the premises of your business is deployed.
30:24
SPEAKER_01: If they don't have a cover call,
30:27
workman in deliberate act then you are liable the court may be
30:32
designed that you
30:33
pay up to 96 times the monthly salary that's what the law says
30:39
so this means that
30:40
if you are paying that person 50 000 every month the court may
30:44
actually rule in
30:45
SPEAKER_01: their favor and pay 10 million kenya shillings why not transfer that risk
30:52
SPEAKER_01: to insurance.
30:54
SPEAKER_01: What about data protection?
30:56
SPEAKER_01: We are seeing a lot of things emerging from that act.
30:59
SPEAKER_01: Why not protect yourself?
31:01
SPEAKER_01: The challenge is both ways.
31:03
SPEAKER_01: The challenge is on the insurers,
31:06
SPEAKER_01: like ourselves here,
31:07
SPEAKER_01: to continue creating more and more awareness to
31:10
SPEAKER_01: go to where the SMEs are in a language that they understand.
31:15
And I would also want to urge the SMEs also to really increase
31:19
their appetite to be
31:20
SPEAKER_01: able to do with the right owners of this.
31:23
SPEAKER_00: Thank you so much, James.
31:25
SPEAKER_00: Kiddinji,
31:26
SPEAKER_00: from your experience working across sectors,
31:28
SPEAKER_00: are there particular industries where the insurance gap seems to be more
31:32
SPEAKER_00: pronounced?
31:33
SPEAKER_00: And what should providers be doing differently to plug those gaps?
31:39
SPEAKER_02: Thanks Terian.
31:40
SPEAKER_02: Sure.
31:40
SPEAKER_02: The straight answer to your question is yes.
31:43
SPEAKER_02: And from my experience,
31:44
the agribusiness sector tends to be treated like the ugly
31:49
duckling when the
31:50
SPEAKER_02: insurance industry,
31:52
especially those who are participating in agriculture in
31:55
primary production.
31:56
SPEAKER_02: Here we're talking about farmers, dairy farmers, crop farmers, and such.
32:00
SPEAKER_02: And of course, I think it's because the stakes are a bit high.
32:04
SPEAKER_02: But there are also other sectors like extractive industries,
32:07
SPEAKER_02: like mining or something like that,
32:09
SPEAKER_02: or quarrying or something like that,
32:11
SPEAKER_02: that tend to be avoided like the plague,
32:13
maybe because they have a big potential for environmental
32:16
damage and maybe things
32:18
SPEAKER_02: like public liability.
32:19
SPEAKER_02: But I think in agriculture,
32:21
there is room to incorporate advanced technologies like AI to
32:25
help insurers,
32:26
SPEAKER_02: underwriters predict risks and also their impacts.
32:30
The idea that I have in mind is to introduce what I would think
32:35
should be called
32:36
SPEAKER_02: dynamic pricing of risks.
32:38
SPEAKER_02: But insurance is also not just about pricing of risks.
32:41
I think some risks can be managed without costing them into
32:44
overall premiums.
32:46
To go back to the idea of dynamic pricing of risks,
32:48
for instance,
32:49
if I have a firm.
32:50
SPEAKER_02: maybe tomato or chili or something like that.
32:53
And the assessment of risks predicts that the next big flood is
32:57
coming after five
32:58
SPEAKER_02: years or 500 years for that matter.
33:01
So why should I,
33:02
as maybe a farmer,
33:03
be made to pay for a risk that is coming after 500 years?
33:06
Which is why I think that idea of dynamic pricing of risk can
33:10
be a concept that the
33:11
SPEAKER_02: insurance companies can adopt,
33:13
SPEAKER_02: especially to work to support those who are in the agribusiness sector.
33:16
SPEAKER_02: Remember, our economy is 25% driven by agricultural sector.
33:22
SPEAKER_02: The other thing is some risks can be managed without being costed.
33:26
And I think what I'm trying to say there is not every risk
33:30
should be priced.
33:30
SPEAKER_02: Some risks maybe should be managed.
33:32
SPEAKER_02: For instance, and James has alluded to that.
33:35
SPEAKER_02: What if we educate our SMEs that if you just,
33:39
SPEAKER_02: for instance,
33:40
SPEAKER_02: go for vaccination or if you jog every morning,
33:43
SPEAKER_02: you have a better chance of living for an extra 20 or 30 years.
33:47
SPEAKER_02: So that when you've managed to,
33:48
you've shown the S&E how to manage risks without necessarily
33:52
pricing that risk into
33:54
SPEAKER_02: your premium.
33:55
SPEAKER_02: So I think bankers and insurers need to know that it's not cut in stone,
33:58
SPEAKER_02: that all risks should be priced.
34:00
SPEAKER_02: especially around the agricultural space.
34:03
SPEAKER_02: Some risk can be managed without being priced.
34:05
SPEAKER_02: Bankers will price that into interest rates.
34:07
SPEAKER_02: And of course, the insurance will price that into their premiums.
34:11
SPEAKER_02: So that's my general point, Terian.
34:14
SPEAKER_00: Thank you so much.
34:15
SPEAKER_00: We've got a couple more questions to cover.
34:17
SPEAKER_00: So James,
34:18
SPEAKER_00: I'll just please come to you on the issue around digital tools,
34:23
SPEAKER_00: which are gaining traction.
34:24
About 83% of SMEs expressing satisfaction when using online
34:30
platforms to manage their policies.
34:32
SPEAKER_00: How is AAR insurance leveraging digital innovation to enhance access,
34:37
SPEAKER_00: affordability and customer satisfaction among SMEs?
34:42
SPEAKER_01: I think that our insurance is quite strong in terms of digitization.
34:48
And what we do is to look at the whole value chain in terms of
34:52
acquisition of the
34:53
SPEAKER_01: customers,
34:54
SPEAKER_01: how we contact them,
34:56
SPEAKER_01: where are they,
34:58
SPEAKER_01: how do we contact them as we observe data protection and other elements.
35:03
We work very collaboratively with our intermediaries to ensure
35:08
that on that part of
35:10
SPEAKER_01: acquisition,
35:11
SPEAKER_01: that is going on everywhere.
35:13
SPEAKER_01: So for that,
35:14
SPEAKER_01: we have already developed a platform that our intermediaries use,
35:19
SPEAKER_01: and it's called Wakala,
35:21
SPEAKER_01: and they are able to contact,
35:23
SPEAKER_01: let me call it the market,
35:24
SPEAKER_01: from that platform.
35:26
SPEAKER_01: Now, what happens when the customers come on board?
35:30
SPEAKER_01: So we're going now to the onboarding process.
35:33
SPEAKER_01: And we have also made it quite easy to onboard our customers,
35:38
SPEAKER_01: especially where there are no declarations.
35:40
SPEAKER_01: There's no need for other medical tests in terms of medical insurance.
35:45
So the onboarding process there,
35:47
we have also really improved our turnaround times.
35:50
It's very possible for you to get a policy document,
35:54
which used to take a very long time before.
35:56
SPEAKER_01: You can actually get it the same day.
36:00
SPEAKER_01: There's no further information required.
36:02
SPEAKER_01: We have also digitized our payment process.
36:05
SPEAKER_01: You can now pay through virial digital platforms.
36:09
SPEAKER_01: We collaborate that with telecoms and the banks.
36:14
SPEAKER_01: And our underwriting also is very digitized.
36:18
SPEAKER_01: But let me enhance a partnership that we have.
36:22
SPEAKER_01: We have a partnership with the MTBA,
36:25
SPEAKER_01: the MTBA platform,
36:27
SPEAKER_01: which now helps us to do our claims management quite efficiently.
36:32
And here,
36:33
it's interesting for customers because they are able to follow
36:37
up on their benefits.
36:39
SPEAKER_01: as they claim.
36:40
SPEAKER_01: So you get your notifications,
36:42
SPEAKER_01: you exactly know when you visit a hospital,
36:45
SPEAKER_01: how much you have spent and the like.
36:48
SPEAKER_01: So you get reports and your right to reports is there.
36:52
SPEAKER_01: Let me say also that,
36:53
SPEAKER_01: like I've said before,
36:55
SPEAKER_01: at every instance during digitization,
36:58
SPEAKER_01: we also measure your satisfaction.
37:01
So when you go to the provider,
37:03
you are able to rate and describe how the experience was.
37:07
And this helps us in the back end to be able to continue
37:10
improving your experience
37:12
because that forms a lot of the meetings that we continually
37:16
have internally.
37:18
SPEAKER_00: Thank you so much, James.
37:19
SPEAKER_00: Kevinji, I'll come to you now.
37:21
We'll touch on global best practice or some models that perhaps
37:27
stand out.
37:28
SPEAKER_00: And of course,
37:29
Wild has worked with global partners to support entrepreneurs
37:32
across the continent.
37:34
Could you tell us a little bit about some international models
37:37
that stand out when
37:38
SPEAKER_00: it comes to building trust and uptake in SM insurance?
37:43
We know that at least in Kenya,
37:46
80% of insurance is sold through intermediaries.
37:48
It's probably important to engage the insurance intermediaries
37:52
because they're the
37:52
SPEAKER_02: ones who interface directly.
37:54
When clients are not buying insurance online,
37:58
of course it works through intermediaries.
37:59
SPEAKER_02: So those are very critical people.
38:01
SPEAKER_02: in terms of two areas.
38:03
Remember,
38:03
I earlier said that these SMEs are bundles of risks and
38:08
opportunities.
38:09
SPEAKER_02: From one standpoint then,
38:11
SPEAKER_02: it follows that the SME owners are risk managers by default,
38:14
SPEAKER_02: whether they want it or not,
38:16
SPEAKER_02: because they are running a business that is full of risks and full of
38:19
SPEAKER_02: opportunities.
38:20
SPEAKER_02: And my point is SMEs need to manage risks,
38:24
SPEAKER_02: whether they are third parties available to support them or not.
38:28
And here I'm talking about insurances and insurance companies
38:31
and the rest.
38:32
SPEAKER_02: We're saying SME owners are risk managers by default.
38:35
SPEAKER_02: So whether there's somebody to support them in that area or not,
38:39
SPEAKER_02: they still need to manage their risk.
38:40
SPEAKER_02: So the question we should be asking is,
38:42
SPEAKER_02: these people who own bundles of risks in the name of SMEs,
38:47
SPEAKER_02: why are they not taking up risk management products?
38:50
SPEAKER_02: Now,
38:51
SPEAKER_02: when they come directly to your question,
38:53
I think insurance can do a better job by taking time to
38:56
understand the business
38:57
SPEAKER_02: models,
38:58
SPEAKER_02: especially the representatives.
39:00
I alluded to the fact that 80% of insurance is probably driven
39:03
by intermediaries.
39:05
SPEAKER_02: Now, those intermediaries...
39:06
can do a better job by taking time to understand the businesses
39:10
that they're
39:10
dealing with or the business models that they're dealing with
39:13
and the kind of
39:13
SPEAKER_02: decisions or decision-making processes that the owners apply to run their
39:18
SPEAKER_02: businesses.
39:19
SPEAKER_02: Now with that, it would be a lot easier, for instance,
39:23
to prescribe products that actually align with the business
39:26
models and actually
39:28
SPEAKER_02: align with the risk appetite of the owners.
39:30
SPEAKER_02: That's what I think should be happening.
39:32
SPEAKER_02: And that's probably the best practice.
39:33
SPEAKER_02: I think mine is in form of a question.
39:35
Why aren't he using our main channels of distribution who
39:39
actually interface with
39:40
SPEAKER_02: the SMEs to help the SMEs become better risk managers?
39:44
SPEAKER_00: The challenge is on.
39:45
Hopefully when we do have this conversation again,
39:48
then we'll have some more answers.
39:49
SPEAKER_00: And have us now take our last questions,
39:52
SPEAKER_00: which will be all to forward,
39:54
SPEAKER_00: looking into what the future looks like and your sort of projections.
39:58
SPEAKER_00: We'll start with James.
40:01
SPEAKER_00: As SMEs evolve, so do their risk profiles.
40:05
SPEAKER_00: How is our insurance thinking about the future of SME insurance and what
40:10
innovations can we expect as you continue to strengthen your
40:14
offering in this
40:14
SPEAKER_00: space?
40:16
SPEAKER_01: Fortunately for our insurance,
40:18
we are very strong in maintaining relationships with our SMEs
40:23
and generally our
40:24
SPEAKER_01: customers.
40:25
SPEAKER_01: We have a very high retention level.
40:29
SPEAKER_01: The customers who come on board, we rarely lose them.
40:33
SPEAKER_01: In fact, they grow organically.
40:36
SPEAKER_01: I want to give you an example.
40:37
SPEAKER_01: There are many SMEs within our book that have benefits.
40:41
SPEAKER_01: gone ahead and converted into corporates over time.
40:45
SPEAKER_01: And it is because of the service that we provide to them.
40:49
SPEAKER_01: And it's just good to take a proactive approach,
40:52
SPEAKER_01: listen to them,
40:53
SPEAKER_01: visit them regularly and listen to what needs them.
40:58
SPEAKER_01: But generally speaking,
41:00
SPEAKER_01: we keep abreast very highly on emerging issues,
41:05
SPEAKER_01: seeing the new diseases which I was mentioning.
41:08
We have chronic management programs just to ensure that even
41:12
these very tough
41:13
SPEAKER_01: diseases,
41:14
SPEAKER_01: we are able to deal with them.
41:16
SPEAKER_01: Wellness programs so that, again, we proactively manage our health.
41:21
SPEAKER_01: We don't need to wait to be sick.
41:23
There are things that we can be able to do to prevent us from
41:27
being sick.
41:28
SPEAKER_01: On the general insurance,
41:30
SPEAKER_01: we are already dealing with the cyberists,
41:34
SPEAKER_01: with data loss,
41:35
SPEAKER_01: these extreme climate change issues.
41:38
So we are continuously looking for even better staff that are
41:43
employed in the organization.
41:45
SPEAKER_01: There is a lot of
41:46
opportunity for Afghan staff to continue embracing and learning
41:51
what new risks
41:53
SPEAKER_01: potent around the world.
41:54
I liked what my friend Kirinya said about being able to predict
41:58
what kind of risks
42:00
SPEAKER_01: that we can be able to foresee.
42:02
So we are in that space and I can assure you that AR has a very
42:06
solid management
42:08
and staff who are continually looking for the best interests of
42:12
our customers.
42:14
SPEAKER_00: Thank you so much, James.
42:15
So we'll now wrap our conversation with a comment from
42:20
Kithinji,
42:21
a forward-looking one.
42:22
SPEAKER_00: Kithinji,
42:23
SPEAKER_00: looking ahead,
42:24
SPEAKER_00: what role can ecosystem players play in building a more risk-ready and
42:30
SPEAKER_00: insurance-aware SME sector in Kenya?
42:33
SPEAKER_02: I think based on what we discussed so far,
42:35
it's becoming clear that entrepreneurship support organizations
42:39
and anyone else who
42:40
supports SMEs need to take into account risk management
42:44
thinking as they support
42:45
SPEAKER_02: their SMEs.
42:46
Like we said,
42:48
the SME owners are by default risk managers,
42:52
whether they like it or not.
42:53
SPEAKER_02: So the only difference is whether they are doing it right or wrong.
42:57
SPEAKER_02: So we need to take that seriously as we support the enterprises.
43:01
SPEAKER_02: Now,
43:01
SPEAKER_02: that's not a very common approach as far as the entrepreneurship support
43:05
SPEAKER_02: organizations are concerned.
43:07
SPEAKER_02: But as while we are committed,
43:09
SPEAKER_02: as we work through the consulting support that we give SMEs,
43:13
it actually enables us to identify fundamental risks like the
43:17
ones I alluded to a
43:18
SPEAKER_02: little bit earlier.
43:19
SPEAKER_02: Are you actually doing the right thing?
43:21
SPEAKER_02: Are you solving the right problem in the market?
43:23
SPEAKER_02: Is the market as big as you think it is?
43:26
SPEAKER_02: Is your value proposition fit for purpose?
43:29
SPEAKER_02: So some more fundamental things that relate to the business model.
43:33
SPEAKER_02: Now,
43:33
SPEAKER_02: what I'd like to say is that most interventions,
43:35
SPEAKER_02: they focus on access to finance,
43:37
SPEAKER_02: business model canvas,
43:39
SPEAKER_02: financial management,
43:40
SPEAKER_02: and things like that.
43:41
SPEAKER_02: Very few of them have that framework or mindset that for me,
43:45
SPEAKER_02: we will support this enterprise to succeed.
43:48
SPEAKER_02: I also need to think about the risks that are inherent in the enterprise,
43:52
the risks that are inherent with the business owner in terms of
43:55
how they make
43:55
SPEAKER_02: decisions.
43:56
And I also need to take seriously some risks that the business
44:00
owners have no control over.
44:02
So I think what I'd like to say is we need to embed and
44:06
mainstream risk management
44:07
SPEAKER_02: as we support our enterprises.
44:10
SPEAKER_00: Thank you, Khedinji.
44:11
SPEAKER_00: If I may take a minute or two of your time,
44:13
SPEAKER_00: both James and Khedinji,
44:15
SPEAKER_00: to respond to this question,
44:17
SPEAKER_00: and then we will call it a day.
44:19
SPEAKER_00: We've got a question from Catherine Waidera,
44:22
SPEAKER_00: and she says,
44:23
SPEAKER_00: the point on risk education,
44:25
SPEAKER_00: especially for SMEs,
44:26
SPEAKER_00: is very important.
44:27
SPEAKER_00: Too often, risk has been skewed to the finance and revenue function.
44:33
What can be done to bridge this risk gap without getting into
44:37
too much insurance jargon?
44:40
We will start with James and then we'll wrap with Kitenji and
44:43
then we'll call it a night.
44:45
SPEAKER_01: Thank you, Catherine, for the question.
44:47
SPEAKER_01: What we are doing tonight,
44:48
SPEAKER_01: I think,
44:49
is a very good example of how we can be able to expand
44:53
education in risk or SMEs.
44:56
I also want to say that we have found it very beneficial when
45:00
we partner with SME
45:02
SPEAKER_01: organizations from different sectors.
45:05
When we sit down and different sectors will have different
45:08
kinds of risks,
45:09
SPEAKER_01: we sit down and we're able to just analyze and discuss potential areas,
45:16
SPEAKER_01: risk management.
45:17
So what I'm saying,
45:18
Catherine,
45:18
is that we need to increase momentum on what we are doing.
45:22
SPEAKER_01: We need to have search forums more.
45:25
SPEAKER_01: We need to move much more to the public.
45:28
We need to look for affordable ways of communicating what
45:32
insurance is all about.
45:34
SPEAKER_01: And one interesting way also would be to go to schools,
45:38
SPEAKER_01: to colleges,
45:40
SPEAKER_01: and create risk awareness from that level.
45:44
SPEAKER_01: So a lot can be done.
45:46
And I continuously see efforts even from our regulator hiring
45:51
are going to
45:52
SPEAKER_01: different parts of the country
45:54
SPEAKER_01: to create awareness on what insurance is all about.
45:58
SPEAKER_01: But yes, Kathleen, a lot of opportunity for us to be able to simply
46:04
SPEAKER_01: our communication.
46:05
SPEAKER_01: And I've always said that even for entrepreneurs,
46:09
let's have fun and create maybe policy documents and even in
46:13
our local languages so
46:15
that people can be able to read and understand what really we
46:19
are saying in the
46:20
SPEAKER_01: small print.
46:22
SPEAKER_01: I agree with you, Kathleen.
46:23
SPEAKER_01: A lot more needs to be done.
46:25
SPEAKER_00: Thank you, James.
46:26
SPEAKER_00: Kiddinji?
46:27
SPEAKER_02: I can add very little to what James has said,
46:30
SPEAKER_02: but maybe my focus will be on the simplifying things like terminology.
46:34
Simplifying was one of the biggest barriers to getting any
46:38
concept is a terminology that we use.
46:41
SPEAKER_02: And then secondly, it's how the concepts are communicated.
46:44
SPEAKER_02: Would it be better to use visuals?
46:46
SPEAKER_02: Would it be better to use lectures or something like that?
46:49
And then again,
46:51
thirdly is to find a way to make the communication a little
46:55
more continuous.
46:57
SPEAKER_02: Not once in a while.
46:58
SPEAKER_02: Say for instance, we have the insurance week.
47:00
SPEAKER_02: That's the only time you get to know about insurance.
47:02
SPEAKER_02: What is happening the other 364 days of the year?
47:06
SPEAKER_02: So a more targeted communication plan for me would help.
47:10
SPEAKER_02: But at the end of the day,
47:11
what I need to hear as an SME owner is you need to make me
47:15
understand that I'm
47:16
SPEAKER_02: actually a risk manager,
47:17
how I can identify the risks in my business and what I should
47:21
do when I identify
47:22
SPEAKER_02: the risks and also the sources of risk.
47:24
SPEAKER_02: That's a good place to begin to learn.
47:26
SPEAKER_00: All right.
47:27
SPEAKER_00: Thank you so much to our panelists.
47:30
I'd like to thank our audience as well for not only making time
47:34
to come in early,
47:36
SPEAKER_00: but also sticking through the conversation,
47:38
SPEAKER_00: quite an enlightening one.
47:40
SPEAKER_00: So thank you so much to our panelists,
47:42
SPEAKER_00: James Kamau,
47:43
SPEAKER_00: who's a group head of distribution at AR Insurance,
47:46
SPEAKER_00: director of strategy.
47:48
SPEAKER_00: at Wild International.
47:50
And today we aimed to unpack the realities behind low insurance
47:55
uptake among SMEs in Kenya.
47:56
And we also got to explore how providers and the ecosystem as a
48:01
whole can better
48:03
SPEAKER_00: align insurance solutions with their real needs.
48:07
SPEAKER_00: I'd like to say thank you to everyone,
48:09
SPEAKER_00: to Mwango Capital for hosting us and to our panelists,
48:12
SPEAKER_00: to our insurance and to Wild International.
48:14
SPEAKER_00: My name is Terri-Ann Chibet.
48:16
SPEAKER_00: As always, it's been such a pleasure to host the spaces.
48:19
SPEAKER_00: Good night and God bless you.