CIC Insurance Group Plc Corporate Newsletter Issue 02 • OUR WORD 2023 Financial Inclusion The Advent of Electric Vehicles in Kenya By Harron Wattanga Mental Health Awareness The Melanated Kintsugi Apprentice By Ruth Wanjiru Embracing inclusive Insurance Understanding The New NSSF Rates Squeeze My Lemon by Promise Chandilanga
2 OUR WORD - ISSUE 002 2023 CIC INSURANCE GROUP PLC KENYA | SOUTH SUDAN | UGANDA | MALAWI GENERAL | LIFE | HEALTH | ASSET www.cic.co.ke We keep our word 0703 099 120 [email protected] Professional Indemnity Insurance provides liability cover to professionals against claims that may arise as a result of errors, omissions, misrepresentation or negligent advice provided in the course and scope of their professional services or malpractice. To find out more, SMS “Professional” to 22471. PROFESSIONAL INDEMNITY for Lawyers
CIC INSURANCE GROUP PLC i TABLE OF CONTENTS PAGES Editor’s Note .................................................................................................................................... Driving Insurance Inclusivity Through Parastatals ................................................................. Electrifying the Roads ................................................................................................................... Pencil Illustration ............................................................................................................................ New Markets in Africa .................................................................................................................... Mental Health .................................................................................................................................. Bridging Insurance Knowledge Gap ............................................................................................ Brandshop ......................................................................................................................................... Environmental Sustainability ........................................................................................................ Melanated Kintsugi ......................................................................................................................... Embrasing Inclusive Insurance ..................................................................................................... Understanding NSSF Rates ........................................................................................................... Squeeze My Lemon ......................................................................................................................... Cooperative Movement ................................................................................................................. Women In Insurance ....................................................................................................................... Pictorial ............................................................................................................................................. CIC INSURANCE GROUP PLC KENYA | SOUTH SUDAN | UGANDA | MALAWI GENERAL | LIFE | HEALTH | ASSET www.cic.co.ke We keep our word 0703 099 120 [email protected] Professional Indemnity Insurance provides liability cover to professionals against claims that may arise as a result of errors, omissions, misrepresentation or negligent advice provided in the course and scope of their professional services or malpractice. To find out more, SMS “Professional” to 22471. PROFESSIONAL INDEMNITY for Lawyers 1 2 4 - 5 5 6 7 - 8 9 10 11 12 13 - 14 15 16 17 - 18 19 20
OUR WORD - ISSUE 002 2023 1 Editor’s Note Joseph Kamiri GM - Marketing & CX Dear Reader, Welcome to the second issue of Our Word Magazine. We thank you for your support so far. In this issue, our theme is Inclusive Insurance. In life, if our homes or business premises are destroyed or damaged by floods or fire, we expect compensation either from our private insurance or from the government. And if we lose our jobs, many of us can claim unemployment benefit to help us pay our way until we find new employment. Inclusive insurance is a concept that allows insurers to achieve social impact as well as business objectives. Different markets have different needs. By understanding the nature of each market and designing appropriate products and distribution networks, insurers can positively contribute to societal resilience. In this issue we look at case in women in insurance, new markets in Africa, mental health awareness among others. We hope that you will enjoy this read. As you do, please share, comment, send requests and let us know what you think by reaching out to [email protected].
CIC INSURANCE GROUP PLC 2 DRIVING INSURANCE INCLUSIVITY THROUGH PARASTATALS Despite the trend toward privatization over the past 20 years, state-owned enterprises are still significant economic players. Kenya has 263 parastatals, 46 of which operate as commercial companies seeking profits and 201 as social corporations Section 2 of the State Corporations Act (1987) defines a parastatal as a body whose majority shares are owned by the government or by another state corporation or a subsidiary of a state corporation. In 2021, a World Bank study on Kenya’s State corporations put total liabilities, including debt, tax and social security arrears, owed by the State firms at KSh2.4 trillion in 2020. The organization warned that this posed a great risk to the government, which is ultimately liable for this debt. This year, parliament raised an alarm over more than KShs21 billion that state entities owe pensioners in unremitted deductions. 160 parastatals were put in the spotlight for not remitting their employees’ retirement remunerations. Currently, the National Treasury has also put parastatals on the spot over loans row amounting to trillions. Treasury Principal Secretary Chris Kiptoo stated that most parastatals are struggling financially and rely on state bailouts necessitating urgent reforms to reduce the financial risks they pose to the government. Although the government is making reforms in the sector, the treasury notes that debtstricken parastatals constitute a significant financial risk to the government. According to an article in business daily published last year, it was reported that parastatals are diverting bank loans tapped for projects to fund operating expenses such as payment of salaries and utilities. This was a sign that long terms loans applied for asset purchasing were channelled to recurrent spending including salaries, electricity bills payment and travel. Over the years, the government has been pumping billions in bailouts to the troubled state entities. However, this is not sustainable as the government finances are squeezed between debt and public spending. The big question now
OUR WORD - ISSUE 002 2023 3 is, how can parastatals be self-sufficient and how does insurance help? Insurance can play a vital role in ensuring parastatals are self-sustainable. Insurance players need to penetrate the parastatal sector, not only for the provision of medical coverage for staff but also for investment products that generate interest. One of the investment vehicles these parastatals can venture in is money market funds. Currently money market funds are one of the most popular investment vehicles in Kenya. This is because they invest in highly liquid securities like cash equivalents, government securities and highly rated debt-based securities therefore having a high degree of safety. They also offer relatively high returns to investors than traditional savings accounts. CIC under Asset Management runs a collective investment scheme and pension products offered in the Kenyan market. One of the products is the money market fund which is a low-risk fund that invests in a diversified portfolio of short-term interest earnings. The need for parastatals to invest in money market accounts is: 1. The fund has scope for good returns meaning the funds are invested in diversified portfolios that generate equitable returns. The fund offers an average return of 8.9 percent which is higher than the inflation rates offered by current accounts. 2. Liquidity- the fund will provide the parastatals with liquidity meaning they can withdraw at any time. With the money invested into the fund, the returns can be used to cater for the utilities and salaries as this fund offers capital preservations and interest income credited monthly. 3. Money Market Funds will help parastatals cultivate a savings culture through making constant topups. This will, in turn, allow the parastatals to have a competitive edge with the private companies and government bailouts will be a thing of the past. This will also ensure the remittance of pensioners’ contributions is remitted. CIC Seniors Mediplan Medical Cover built for Comfort in Old Age SMS “Seniors” to 22471 0703 099 120 [email protected] Grace Joan Brand & PR
CIC INSURANCE GROUP PLC 4 CIC Seniors Mediplan Medical Cover built for Comfort in Old Age SMS “Seniors” to 22471 0703 099 120 [email protected] The Advent of Electric Vehicles in Kenya Electrifying the Roads I t’s 5:10 PM on a Monday evening, and Wanjiku is eager to leave the office in Community and beat the traffic to make it home early. As a CBC mom, she knows there may be homework waiting for her. In the past, it was easy for her to book a ride with SWVL (Swvl was a bus hailing app that allows customers to book fixed-rate rides on buses and vans), which she would pick right outside her office and would get dropped right outside her doorstep. However, the company or app met an unfortunate demise at its peak (may it rest in peace). Now, she has to take a matatu to town and then another one to Kitengela. But there’s something unique about the two buses she uses today - apart from being clean and newer, they are electric. Welcome to the 21st Century! What seemed like a far-fetched dream, has been accelerated by various factors. The push for sustainability, environmental conservation, and reducing reliance on fossil fuels has led the world to consider electricity as a source of energy, and Kenya is not lagging behind. The very first crude electric vehicle was developed around 1832 by a gentleman named Robert Anderson. However, it took about 170 years for electric vehicles to hit the production lines. No, Elon Musk, the Twitter guy, was not the first inventor of the electric vehicle. He bought shares in the company right after selling PayPal. Nevertheless, he has made significant contributions to the development of electric vehicles, particularly by improving battery technology. But that’s a story for another day. So, what is the main difference between electric vehicles (EVs) and traditional internal combustion engines? Without delving into a physics class, I’ll try to explain it as simply as possible. Internal combustion engines generate power by burning gasoline, oil, or other fuels (such as petrol or diesel) with air inside the engine. The hot gases produced drive a piston, which is connected to a crankshaft that, in turn, moves the car through a gearing system. Don’t worry; your mechanic or local “makanika” still has a job after this detailed explanation. On the other hand, EVs generate power by converting electricity into mechanical energy. Energy is stored in a battery, similar to how you charge your phone, and the battery powers the motor, which moves the wheels. Enough of the physics class, you can breathe again. Coming back to Kenya, we have witnessed a gradual introduction of EVs into the market. From small vehicles like Nopea cabs, which exclusively used Nissan Leaf EVs (which also suffered the same fate as SWVL and met its untimely demise, another moment of silence), to Rivian pickup trucks used in conservation efforts, privately owned Teslas and Volvos, motorcycles, and even buses in the public transport sector. Companies like KPLC are planning to replace their fleet of 2000 vehicles with electric vehicles by 2027. Essentially, there is now an EV available to meet everyone’s needs. The revolution is here, and some sectors are already aligning themselves with this reality. Kenya, as a country, is a bit behind its neighbors. Uganda, with its stateowned Kiira Motors Corporation (KMC), is producing locally made EVs, with the Kayoola buses being utilized in the public transport sector. Rwanda partnered with Ampersand,
OUR WORD - ISSUE 002 2023 5 a company specializing in electric motorcycles, to launch a fleet of e-motorbikes for ride-hailing services in Kigali. They also have electric buses and are investing in charging infrastructure across the country. Zig Ziglar, an American entrepreneur once stated, Success occurs when opportunity meets preparation”. As CIC, the biggest motor underwriter in the republic of Kenya, what strides are we making to ensure we are the go to insurance underwriter of this great electric wave? Are we creating capacity by partnering with valuers, assessors, loss adjusters who are familiar with EVs? This is just but a challenge to us to stay ahead of the game. As Swaleh Mdoe always says, “Tafakari hayo.” Pencil Illustration Haron Wattanga RM Sales GB Antony Sungu Cooperatives Inclusive Insurance For Motor, Medical, Education, Money Market, Retirement & even more Jipange na CIC GROUP
CIC INSURANCE GROUP PLC 6 T he world is indeed one village all made possible by global economics which have been accelerated by tremendous improvements in technology. All industries are now shaped by how fast they are responsive to global trends, particularly the changes that come with every new technologic development. In Malawi for instance, “5G” has recently been launched and is seen by many as the missing pie that will power areas such as cloud computing. In Kenya, it is seen by many as boating a steadily advancing integration of new technologies which is also making strides in electric cars and bullet train. According to research, Africa has more than 38 satellites launched to space to enhance technology, with South Africa leading the way with a total of 11 launched satellites as at 2022. This advancement in technology has advantages that every industry needs to take, specifically the Insurance industry. The International Cooperative Mutual Insurance Foundation (ICMIF) has among others pointed out new insurance markets that come with these technological advancements like Virtual Guards, Point of Sale Purchase & Data Capitalists. Under Virtual Guards, insurers will target the millions of people interacting on the internet. Since the Metaverse world keeps growing with more users, there is a rising demand for protection that covers digital assets like (crypto keys, virtual identities and brands). Insurers will offer covers to this group by offering bulletproof identity protection that prevents hacks, breaches and theft. Data capitalist market will focus on personal data protection. Almost all internet users are fully aware of the value of their personal data and they expect more for sharing it. Insurers can engage these segment of users via customized offers, proactive insights for risks prevention and protection management with a portfolio of covers that change based on life events. As mentioned earlier, living in a global village, there is a lot of trade and business done online. People will value the peace of mind that comes with knowing that the items they buy like jewelry; travel or concert tickets are protected from the moment they are purchased. Insurers will provide this peace in form of new market called Point of Sale purchases through which they can reach more customers and demonstrate the value of insurance and increase their relevance to the common person. That said, the insurance industry needs to be responsive to technologic advancement in order to find new business opportunities. Time for conventional insurance is over and the new generation demands for customized covers. They will appreciate insurance covers that affects their daily life, which in most cases is enabled by technology via their smart phones and computers. Every day they interact with these gadgets either for work or social interaction. Insurers that tap into these markets are likely to build a strong relationship with the clients and achieve more gains. In conclusion, Malawian insurers need to explore on what new markets they can tap into with the introduction of 5G. As saying goes ‘The sky is the limit’. Virtual life Insurance can also be taken up by influencers. Given the rise in numbers of TiK-Tok and WhatsApp users, there is likely another fastgrowing market with a target on Influencers. NEW MARKETS IN AFRICA Gregory Makweti CIC Malawi
OUR WORD - ISSUE 002 2023 7 Mental Health Awareness Mental Health conversations are both a scare and an open door for stigmatization in most African countries. Speaking openly about any suffering along this health concern is as good as firing a bullet right up into your skull, with the cheering squad being those meant to support you. Nonetheless, it is time for us to appreciate that mental health is an illness like any other, and should be accorded the same support. Victims of mental health ought to get best care to recover and achieve their ultimate best. To bring it home, an estimate by the Kenyan National Commission of Human Rights (KNCHR) notes that 40% and 25% of inpatients and outpatients’ visits emanate from mental health conditions. Among the visits, diagnosis from these visits cites cases of anxiety disorders, stress, substance abuse, and depression. As earlier indicated, mental health being an illness like any other can affect both children and adults. Mental health is made up of psychological, emotional and social well-being facets. These facets affect how we act, feel, and think. Additionally, it trickles down to our capacity to relate with others, handle stress, and make healthy choices. These factors occur at different developmental stages, from childhood, adolescence, all the way to adulthood. The more we downplay mental health, the greatest the risk of exposure to long-term health conditions, including stroke, heart disease, and diabetes. As we work, it is crucial to understand that there are factors with a likelihood of influencing our mental health. For instance, have you ever been subjected to demands that exceeded your capacities in terms of resources and abilities? How did you handle such a situation? Again, in case it happens, for you to have an increase in the demand of commitment you have in your work and family, how would you protect your mental health? Pondering on these questions is the ultimate protection to ensure you have a balance in life. In the wake of embracing mental health, organizations are now organizing talks and workshops to ensure their staff are well versed on matters wellbeing. In case you ever find yourself deep into the pangs of mental illness, talk about it, seek assistance, and engage professionals. On the flip side, if you know anyone struggling with mental health, it is only helpful to support them, refer them to professionals, embrace their condition until they are fit to stand again. A wounded soldier is reduced strength for the army and a supporting soldier is the strength of the wounded soldier. Let’s make the army strong. Samson Muchiri Medical
CIC INSURANCE GROUP PLC 8
OUR WORD - ISSUE 002 2023 In 2021, Franklin a 29-year-old Kenya Defense Forces soldier started getting insurance deductions on his pay slip. He engaged the Department of Defense on the issue and he was informed that he did sign up for an insurance cover with one of the biggest insurance firms in the country. Franklin later recalled of a financial advisor requesting for his name and employee number but he could not recall signing any documents. He is among the few soldiers who have no knowledge on insurance products and how it works. In February 3rd 2022, former assistant Chief of the Defence Forces personnel and logistics Major General Aphaxard Kiugu presided over the launch of a bancassurance affinity partnership between the Defence Savings and Credit Society (DESACCO) and Housing Finance Company (HFC)at the military headquarters in Nairobi. This partnership saw DESSACCO offer CIC general and life insurance products to Kenya Defence Forces (KDF) personnel through the HFC Bancassurance Intermediary. KDF personnel deployed in different areas some classified as remote are able to access affordable products in a timely manner as the partnership leverages on technology. The CIC insurance products being offered through the partnership fire, burglary and loan guard. Other insurance products offered are motor vehicle insurance, medical insurance for parents and parents-in-law, education policy as well as personal accident cover. However, these covers only benefit soldiers who are members of the Sacco. Although all soldiers enjoy a medical cover from their employer, very few have purchased other insurance products except for the mandatory motor vehicle insurance. While there exists little to no research on the level of knowledge of insurance products among the KDF officers, it is important to educate them about the various products available. Being a Kenya Defence Forces officer in Kenya is not an easy task owing to the risks in the line of duty. It becomes imperative then for the officers to have financial planning tools appropriate for them and their families. In the last two years, CIC has been targeting this group by forming strategic partnerships with various barracks. The CIC Life Assurance agency team has been offering financial planning clinics to the soldiers and their families. The aim of the clinics is to ensure the soldiers are equipped with the right tools when it comes to financial security. This has provided an opportunity for the soldiers and their families to have one on one discussions with CIC financial advisors. These partnership amongst others has seen CIC Life’s market share grow to 6.5% in 2022 from 5.6%. in 2021. CIC has and is working hard to establish knowledge partnerships. This has provided a large platform for the company to market its products as well as bridge the knowledge gap. These partnerships have resulted in growth of insurance uptake because people become knowledgeable about insurance and purchase covers based on their needs. Like the famous poet, Ehsan Sehgal once said, “Sharing knowledge is a charity of knowledge that constitutes the ways of a beautiful life’’ 9 BRIDGING INSURANCE KNOWLEDGE GAP AMONGST KENYA’S MILITARY Grace Joan Brand & PR
CIC INSURANCE GROUP PLC 10 Enquire about desired item availability (Colour, Size, Quantity) Step 1 Buyer to confirm total cost Step 2 Buyer to make payment to the Cashier or Pay Bill No: 600122 Acc Name: Brandshop Step 3 Avail a copy of receipt to Brand and Marketing and PR Team (John) Step 4 Pick Item Step 5 Brand Shop items instock Pocket Umbrella Ksh 800 Jute Bag Ksh 530 Cap Ksh 250 Premium Umbrella Ksh 700 Lunch bag Ksh 1400 Pen Ksh 55 Canvas bags Ksh 250 Fleece Blanket Ksh 2500 Hoody Ksh 1800 Laptop Bag Ksh 2000 Dry & Cool Ksh 1000 Tshirt Ksh 450 Coming soon Coming soon Water Bottle Ksh 1200 Key Holder Ksh 210 Puff Jackets Ksh 2700 Thermo Cup Ksh 1200 Coming soon Coming soon Purchase Process Enquiries Call Ext: 1587 Paybill: Or Email: [email protected] 600122 Account No. BrandShop Call: Ext 1497 Buying Process Brandshop Items Instock
OUR WORD - ISSUE 002 2023 11 According to vision 2030, Kenya is envisioned to being a country with a clean, safe and sustainable environment. This change is urgently needed because air pollution, climate change, waste and deforestation threaten the livelihoods of the local population. According to a report by Eden reforestation projects, over 90 per cent of Kenya has been deforested in the recent decades leading to extreme environmental degradation. Human activities such as logging, charcoal burning and illegal settling to create farmland are significant factors of deforestation which has resulted in a severe increase in drought and extreme poverty. It is against this backdrop that His Excellency President William Ruto launched a nationwide tree planting campaign on 21st December 2022 to raise Kenya’s tree cover to 30 per cent by 2032. The national tree growing and restoration campaign is targeting to plant 15 billion trees by 2032. The initiative requests each individual living in Kenya to plant 30 trees a year amounting to 300 trees per person in 10 years. The programme is being undertaken in all 47 counties nationwide with all stakeholders including community groups, NGOs, Schools, Churches, farmers and others being called upon to take active participation by raising tree nurseries and planting trees in their compounds and forests. However, over the year’s corporates have been participating on tree planting initiatives by partnering with NGO’s and government agencies in an aim of promoting a sustainable environment. CIC group has also been on the forefront in playing its part on sustainable development by engaging in various tree planting initiatives over the years. Through its foundation program, CIC group is committed to a long-term sustainable approach to caring for and safeguarding the environment. As a result, the organization has strived to evolve and implement its corporate environmental policy in addition to complying with the environmental laws and regulations. One of the main ways CIC aims at promoting environmental protection and conservation is through partnerships with other institutions. The organization believes that a single institution cannot achieve much and needs to team up with others in joint projects. Last year, CIC was part of the sponsors of a tree planting day activity at Kahawa Garrison barracks. This activity saw a total of 7,000 trees planted at the military cantonment aimed at improving the forest cover in the country. Every year, during the annual cooperative’s celebrations, CIC among other cooperatives and stakeholders, take part in the tree planting activity at the ASK Jamhuri grounds. In partnership with Cooperative Alliance of Kenya (CAK), CIC has been participating in this activity of planting tress whose effort is to improve the environment and get raw materials for some key value chains that are crucial to the cooperative movement ecosystem. This year, CIC is part of the sponsors of the 7th edition Kaptagat forest annual tree planting event in Elgeyo Marakwet County. The tree planting event which is run by NETFUND, was initiated in 2017 and aims at addressing environmental challenges being experienced in the region through collaboration with various stakeholders to conduct rehabilitation and restoration of degraded forest and riparian areas within the ecosystem. CIC PARTNERSHIPS WITH GOVERNMENT AGENCIES FOR ENVIRONMENTALLY SUSTAINABLE DEVELOPMENT Grace Joan Brand & PR
CIC INSURANCE GROUP PLC 12 By Ruth Wanjiru I had the most exhilarating experience today I stood beneath a massive waterfall for hours My heart, naked I gasped for breath The force and consistency of the falling water Threatening to drown my softening soul I did not flinch or pull back Yet life did not escape me. I gave in and let the cascade of tenderness Flood the wilderness of my heart’s shadow An unwanted wilderness I had somewhat become accustomed to My soul. She closed her eyes and slipped under How could such a frightful experience feel so sweet? See, I wasn’t alone. He was there He whose surname means healer He calls himself, a fixer I perceive he is a healer. A budding Kintsugi artist Trained by the arduous and incalculable terrain that is life A life that dared defy his programming He now accepts, though painfully, that life has no algorithm. He secured me tightly in his embrace and we drowned I savored every moment Fully. Unhinged. Unbothered. Our souls, naked, yet not ashamed. All my senses came alive. They ran amok But in a manner most calm and soft A sensory experience I last enjoyed Over a decade and a half ago Who is this melanated apprentice of Kintsugi? His gentleness, mindfulness, vulnerability and rawness Slowly eroding my pride and sensibility. Dripping hot liquefied gold Through the cracks and imperfections Of the pottery that is my fragmented sentimental being; Broken by cycles of disappointment and unexplained rejection. Ghosting, they call it. It is terrifying yet soothing. Therapeutic. Restorative. Medicinal. Where has this son of the soil been cocooning? It felt like meeting my sentimental twin. A transcendental communion of familiar souls. A God-incidence. I won’t question it or overthink it. I am prone to doing so with matters outside my control. What I will do, is go with the flow. Yahweh’s flow. I will enjoy the rarity of this moment in its fullness However long or short it may be. It is for a season, a reason or a lifetime. I fret not. Beneath the waterfall In the embrace of the melanated Kintsugi apprentice. “Kintsugi is the Japanese art of putting broken pottery pieces back together with gold — built on the idea that in embracing flaws and imperfections, you can create an even stronger, more beautiful piece of art. Every break is unique and instead of repairing an item like new, the 400-year-old technique actually highlights the “scars” as a part of the design. Using this as a metaphor for healing ourselves teaches us an important lesson: Sometimes in the process of repairing things that have broken, we actually create something more unique, beautiful and resilient.” Ayuda, T., 2018 <https://www.nbcnews.com/better/ health/how-japanese-art-techniquekintsugi-can-help-you-be-morencna866471> THE MELANATED KINTSUGI APPRENTICE Ruth Wanjiru Branch Manager
OUR WORD - ISSUE 002 2023 13 Inclusive insurance is expanding the supply of insurance solutions to people, families and businesses who have not had access to insurance before. It is estimated that only 3 to 7% of the population in developing countries can access insurance and hence the need for the development of various microinsurance solutions in order to deliver on UN Sustainable Development Goals (SDGs) by 2030. Kenya being one of the largest economy in East Africa and the leader in mobile money with a dynamic FinTech ecosystem in Africa has its largest population categorized as emerging insurance consumers. As at the end of 2021, the country’s insurance coverage was only 8.3% and the penetration rate stood at 2.24%. Many projects and initiatives have been implemented in the country in support of the Vision 2030, the national government Bottom-Up & Big Four Agendas aimed at providing solutions to the various socioeconomic problems facing Kenyans, thereby creating an opportunity for the micro-insurance market, which remains untapped. Some of the reasons for minimal growth in micro insurance market are low consumer awareness, a weak insurance culture, inadequate product designs, uncompetitive pricing, low income levels among Kenyans, and expensive distribution channels. HOW TO INSPIRE GROWTH IN MICRO INSURANCE MARKET There are various ways to inspire growth in this market, which bears potential owing to the millions of Kenyans in the lower income bracket. Here are some of the measures to implement for success. Conduct Public Awareness programs Insurance uptake is higher in learned households who mostly are around urban areas and are aware of the importance of insurance. Unfortunately, for microinsurance, majority of the potential customers have very little to no knowledge about financial products most of whom live in rural areas hence the need for well thought out strategies on effective marketing and consumer education to be able to increase the demand for insurance. EMBRACING INCLUSIVE INSURANCE
CIC INSURANCE GROUP PLC 14 Great Customer Experience Excellent customer experience and good customer relationship plays a key role in winning and maintaining a micro-insurance client. Customers should be engaged regularly through various means including simple acts like wishing them a happy birthday to sending an sms which will create a safe space for feedback. A happy customer will tell six or more people about your products. Strategic Partnerships & Alliances To be able to serve the underserved, the insurance mindset should shift from disaster risk protection to prevention by moving from providing risk transfer products and services as means of protecting the insured from disaster risks to risk prevention through incentives, awareness, capacity and funding. This can only be attained by collaborating with government and other development partners such as International Cooperative and Mutual Insurance Federation (ICMIF) in which CIC Group is a member, Blue Marble, Acre Africa etc. Micro insurance requires economies of scale to be profitable. Strategic alliances and partnerships with other industry players including financial institutions plays a key role in the management of operation and distribution costs for one to attain the market stability needed for sustainability. Technology & Innovations. The renowned strategist Michael porter stated, “Longterm winners have bitten their competitors through innovation and dynamism”. This shows the importance of getting the most out of the current technological advancements in the development of innovative microinsurance products that adopt to the specific needs of the target market, creating a competitive edge. For instance, the insureds some of whom may be far or in rural areas can be reached and served through the mobile platforms, right from onboarding stage to claim settlement at the comfort of their homes say through picture-based insurance. In turn, this will reduce the operational costs leading to affordable premiums. Product Development & Competitive Pricing The target market comprises of low income earners who may not afford high premiums and are price sensitive which presents a challenge in creating a balance between affordability and sustainability. The needs of the market should be carefully researched to facilitate designing of high quality microinsurance products and services that will provide desired coverage with fewer exclusions that can be serviced by the insureds and are well aligned with the company’s profitability and growth strategies. The product design should consider the insureds’ cash flow patterns and select the most favorable payment method that aligns to the company’s financial goals. Ruth Bowen Underwriting Manager
OUR WORD - ISSUE 002 2023 15 In March 2023, the government implemented a law to increase the monthly NSSF contributions by employees. How will this implementation affect employers and employees? What are the new NSSF rates? Our word magazine sat with CIC’s Head of Retirement Benefits Mr. Vincent Ochoi to understand the changes in the NSSF rates. 1. Expound more about the NSSF Act what it is about and what implementing the act will mean to employees in the formal sector? The NSSF Act 2013 refers to the National Social Security Fund Act enacted in Kenya. The act establishes the National Social Security Fund (NSSF), which is a mandatory social security pension scheme for employees in the formal sector of the country. The Act aims to provide social security benefits to eligible employees, ensuring their financial stability and well-being during retirement, disability, or in the event of their death. Implementing the NSSF Act has several implications for employees in the formal sector such as, retirement benefits, disability benefits, survivor benefits, mandatory contributions, compliance and enforcement. 2. How and when will the deductions be done while the Act is in force? • The new Act includes two contribution levels: • Tier 1 contributions are non-refundable and must be made to the NSSF. • Tier 2 - Employers may remit their contributions to NSSF or to a Retirement Benefits Authority (“RBA”)- approved scheme. • The pension contribution rate has been established at 6% of earnings for employees and 6% of earnings for employers, with a monthly maximum contribution of KES. 2,160 for the first year. 3. Deductions are expected to increase annually. Is this the case and what will the basis? Contributions will be gradually increased over a five-year period, and employers must pay contributions to the NSSF by the ninth day of the following month. Tier 1 and Tier 2 contribution amounts are based on the minimum wage and average earnings as published by the Ministry of Labour and the Kenya Bureau of Statistics. The Act calls for a five-year steady rise in contribution amounts. 4. Many employers have private pension schemes for their employees. Given the increased contributions, what would be your advice to employers contributing to the two schemes? Our advice for these employers is to do an integration of contributions. This is basically a reduction or netting off the amount of contributions to the Scheme by the amounts of contributions due to NSSF Act 2013 and keep the total monthly deductions unchanged. This helps minimize the cost impact on both the employer and employee. For example, where you used to contribute a total of Kshs 5,000.00 to the Scheme, you can first offset with Tier 1 and Tier 2 contributions of Kshs 2,160.00 and remit the balance of Kshs 2,840.00 to the Scheme 5. CIC runs two private pension schemes, Jipange Pension and Umbrella Fund. In view of the NSSF Act, why is it important for Kenyans to consider saving for retirement? • This is a systematic and disciplined way of saving. • If one loses their job, retirement benefits can be an Invaluable fall-back position. • It is a way of planning for retirement by saving when one has the energy • The older one grows, the more unemployable they get or if self-employed, the lesser productive they get, hence the need to prepare early. Investing in the pension plan will ensure this smooth transition. • It is upon each individual to fund his or her own retirement and by failing to plan and prepare, one may end up becoming a burden to their children and family. • As one grows older, medical needs increase (care on your body demands increase), and pension funds will come in handy. • Investment income earned by registered retirement benefits schemes is taxfree. No withholding tax on interest or dividends, no income tax on rent etc. • Retirement benefits schemes improve the standard of living when the employees retire by reducing the dependency ratio in the society. UNDERSTANDING THE NEW NSSF RATES Vincent Ochoi Head Retirement Benefits
CIC INSURANCE GROUP PLC 16 SQUEEZE MY LEMON Mother, Kamdthothi we!, thawa mvula (Kamdothi, run away from the rain) Kamdothi we!, thawa mvula (Kamdothi, run away from the rain) Usungunuka,(You will melt) Thawa mvula, thawa mvula (run away from the rain, run away from the rain) Do you remember how I would ask you to tell us this tale each evening? I never seemed to get used to the enchanting way your voice would carry over the threshold of our home. I would picture the clay-made little girl running while melting like a scorched wax model until she was reduced to a blob of dirt on her Mother’s doorstep. I miss you deeply, Mother. I assume by the time the envelope encasing this letter lands in your palm; you will be smiling from ear to ear. Like you used to smile, back when it was my school report. I would be bouncing on the balls of my feet, beaming to see the pride that would startle itself on your face knowing I had scooped the first position like you always expected me to. You would show it to every visitor that month until the paper would get dirty and start to tear from being passed around. I was going to be a nurse, you would say. Prophetic, weren’t you? It must be nearing the end of the day there. It must be windy or chilly with the stinging August weather. You must be sitting on your wooden chair with a glass of ‘Thobwa,’ millet, and corn brew, smoky and almost fermented as you like it. I picture your fragile frame bent on our veranda, the dry weather having blown your silvering afro, cracked your skin, and slit your lips. I can almost feel the ultimate litany of the Nyasaland madness. From the indigo and orange hue in the skies, the ambiance from the market a few meters away, the smell of burnt groundnuts, and the cacophony of birds chirping from our orchard, all this swathed in the shoulder of the evening. What a privilege! We never knew silence when Father was alive. It was either his Sunday Koffi Olamide cassette constantly blasting on his Sub-woofer, making the windows of our house pulse. Or it was one of us crying, either me, Juju, _or mostly you. Father was a god. My god, he controlled everything in the four corners of our home, from where to place a doormat, how to breathe, and even when to relieve ourselves. With him, it was all about power, rules, and punishments. We were not allowed outside to interact with others. Our world was within those four walls. Sometimes Juju and I would even lose our sense of time. If you remember correctly, you taught Juju and me that nature was the best medicine for everything physical, spiritual, and emotional. You told us tales of powerful gods like M’bona and Napolo, our guardians, before we turned destructive and angered the soil, water, and air spirits. Only during an eclipse would the sun goddess, Dzuwa, grant us nature’s fertility. “Dzuwa gives us a chance to change, reclaim the power that’s rightfully ours, and make peace within ourselves. Some demons need more than Jesus.” you would soliloquy, taking a dramatic pause for effect. Yours truly, Kamdothi. Promise Chandilanga CIC Malawi
OUR WORD - ISSUE 002 2023 17 For any business organization to thrive in the current turbulent and challenging market milieu, it must adopt competitive strategies. Kenya is the third from the bottom in insurance penetration rate in Sub-Saharan Africa at 3%. South Africa is at the top with 17%. (KPMG 2021). The penetration is an indicator on how developed the insurance sector is in a specific country by relating the total amount of insurance premiums to the Gross Domestic Product (GDP). This low rate means a larger insurable population is not taking the insurance services. All over the world, cooperative enterprises have made commendable impact socially, economically, and environmentally. In Kenya, the cooperative movement is about 115 years old since the first cooperative, Lumbwa, an agricultural cooperative, was formed in Kipkelion, Rift Valley in 1908. Cooperatives in Kenya are mainly in finance, agriculture, housing, transport, arts and culture sectors. There are over 14M members in 25,050 registered cooperatives. 57.8% of the cooperatives (3,052) are in finance, 24.3% (1,295) in agriculture, 8.5% (447) in housing, 4.4% (235) in transport and the rest form 4.8% (252). (ICA 2023). Strengths of cooperatives Given the spot cooperatives occupy in national development, and since they are rooted in the people and communities they serve, cooperatives are wellplaced to effectively act as efficient distribution channels for increased penetration of insurance services. This makes the cooperative movement a not-to-be-ignored aggregator and accelerator for the advancement of the financial services sector in which insurance is a vivacious player. Additionally, cooperatives have a huge customer base, a stable capital base, effective organizational governance, proficient managerial and technical workforce, are up to date with information communication technology and are near to their members. They also have strong regulatory frameworks that can conveniently accommodate the distribution of insurance businesses. This kind of arrangement is called SACCO ASSURANCE or better COOP ASSURANCE since not all cooperatives are SACCOs but all SACCOs are cooperatives. The opportunity The Sacco Assurance model is an aggregator that is gaining a lot of interest in the insurance services distribution value chain in Kenya. Nevertheless, insurance awareness and information among the cooperators remains too low. Therefore, both the insurance sector and the cooperative movement should actively engage in this untapped space. It is time all the cooperatives in Kenya embrace Sacco Assurance fully. COOPERATIVE MOVEMENT: A Key Booster of Insurance Services In Kenya
CIC INSURANCE GROUP PLC 18 There is also a need to develop Sacco Assurance regulations to ensure that the cooperatives conduct themselves as aggregators in distribution of insurance services as intermediaries in compliance with provisions of the Insurance Act. A win – win situation If the Sacco assurance arrangement is utilized effectively, the cooperatives will gain by getting additional income from diversification of their services into insurance products and they will be a one stop shop for financial services which will boost customer loyalty. They will do this while utilizing their current resources hence increasing their profitability. Comparably, there will be an increase in insurance market penetration by reaching the vulnerable but less accessible customers and the premium turnover will be improved. The insurers will get an opportunity to diversify their distribution methods to avoid excessive dependence on a single network thus reducing the risk. Customers own, trust and rely on their cooperatives a fact insurer will take advantage of since buying of insurance products requires clients to place trust in the company one is dealing with. The customers will have a wider range of cheaper products on offer which are tailor made to match their unique needs. These products will be delivered at their doorsteps reducing the hardships of looking for them and premium payment will be arranged to their convenience. In the long run, this concept of Sacco Assurance will contribute to an increase in the penetration rate of insurance services in Kenya by a big margin, to even over 10%. Gilbert Riober Cooperatives
OUR WORD - ISSUE 002 2023 19 A CASE FOR WOMEN IN INSURANCE AND WHY THEY MATTER The second Sunday of May every year marks an important day on the calendar globally. On this day, mothers are celebrated worldwide. Mainstream and social media is often awash with endearing messages for mothers as gift shops and social places go the extra mile to recognize the irreplaceable place of mothers. This year was not any different as messages of love to mothers took center stage on all platforms. Despite this, mothers, and women in general, still face hurdles in the financial world in terms of opportunities, access to services and having products specially designed for them. In spite of the world working towards the achievement of Sustainable Development Goals (SDG) particularly SDG 5 that calls for gender equality, the gender gap in many countries is still wide. For instance, Kenya had an overall score of 0.692, where a score of one represents full achievement of gender equality, according to the Global Gender Gap Report 2021, highlighting the need to close this gap. On the background of this, data shows that women plough back at least 90% of their income to their families leading to better health, education and social outcomes. This in turn leads to a better and healthier society, more development and a snowball effect in poverty reduction. According to the International Financial Corporation (IFC), more than 1 billion women globally are not able to access formal financial services such as borrowing, insurance, savings and pensions. This is in spite of the fact that more women earn their living from micro and small businesses, which are usually operating on shaky ground, especially without financing. Women in formal employment also face challenges such as having fewer women in work places, especially in the C-suite. For instance, in the USA and UK, women hold only 29% and 20% respectively of senior positions. In terms of products, many financial instruments such as insurance tend to be gender neutral, developed with men in mind. This means that many insurance products do not have a gender lens and fail to serve the specific needs of women, contributing to a lower uptake. This is more evident in health and life insurance policies. On the other hand, there is a real value proposition in promoting the welfare of women in the insurance sector as clients, employees, business decision makers and in the sales force. A study dubbed ‘She for Shield’ undertaken by the IFC, Accenture Group and AXA estimates that the global insurance premiums attributed to women by 2030 could hit the $1.7 trillion mark. Most of these premiums will be from emerging markets, which is where Kenya falls. This presents a real business case for insurers to put on their best caps and generate innovative ways to capture the opportunities. The argument is that as more women complete tertiary education and enter the workforce, they will be empowered to make financial decisions that impact their families, including purchasing insurance for the benefit of their kin. Women also tend to be loyal customers, making it easy to crosssell, reduce acquisition costs, and make great brand ambassadors. Studies reveal that women are more likely to recommend products to their social circles more than men. Women also have a higher success rate in selling to other women, and men too, than their male counterparts. Having female leaders in the C-suite is beneficial as they are able to advocate and mentor other women within their companies including the insurance industry. In addition, women in senior management are also able to advice about products suitable for the female population, which in the end has a positive impact on an insurer’s balance sheet. In fact, companies that tend to have a balanced gender in management are able to tap into a more robust talent pool and have effective solutions to complex problems. If we are to achieve financial and insurance inclusion, we have to ensure our strategies have a gender lens in our workspaces and product design. This clarion call is not just for women, but for men as well, as it is not a gender war, rather an initiative leading to a common good for the society. As the valiant Malala says, ‘We cannot all succeed when half of us are held back’. Yolanda Vumilia Group Life
CIC INSURANCE GROUP PLC 20 Q2 Pictorial
2 OUR WORD - CIC OFFICES ISSUE 002 2023 CIC INSURANCE GROUP PLC. CIC PLAZA MARA ROAD, UPPERHILL P.O. BOX 59485-00200 NAIROBI, KENYA +254 020 282 3000, 0703 099 120 [email protected] www.cic.co.ke CICGroupPLC CICGroupPLC CICGroupPLC KENYA • SOUTH SUDAN • UGANDA • MALAWI GENERAL • LIFE • HEALTH • ASSET NAIROBI BRANCHES: TOWN OFFICE Reinsurance Plaza Mezzanine Floor, Aga Khan Walk Mobile: 0703 099 500 [email protected] BURU BURU BRANCH Mesora Centre, 1st Floor Mumias Road Mobile: 0703 099 564 [email protected] WESTLANDS BRANCH Pamstech House 2nd Floor, Woodvale Grove Mobile: 0703 099 727 [email protected] THIKA BRANCH Thika Arcade, 6th Floor Mobile: 0703 099 641 Kenyatta Highway [email protected] KITENGELA BRANCH Kitengela Mall, 4th Floor Mobile: 0703 099 740 [email protected] NANYUKI BRANCH Pearl Place, 1st Floor Mobile: 0703 099 770 [email protected] NAIVASHA BRANCH Eagle Center, 1st Floor Mbariu Kaniu Road Mobile: 0703 099 763 [email protected] NYAHURURU BRANCH Kimwa Centre, 2nd Floor Kenyatta Avenue Tel: 0703 099 887 [email protected] MACHAKOS BRANCH Kiamba mall, 2nd Floor Tel: 0703 099 960 [email protected] KIAMBU BRANCH Bishop Ranji Cathedral Plaza, 2nd & 3rd Floor Tel: 0703 099 630 [email protected] NYERI BRANCH Co-operative Union Building 3rd Floor, Tel: 0703 099 680 [email protected] NAKURU BRANCH Mache Plaza, 2nd Floor Geoffrey Kamau Road Tel: 0703 099 775 [email protected] KISUMU BRANCH Wedco Centre, Mezzanine Floor Oginga Odinga Road Tel: 0703 099 600 [email protected] HOMABAY BRANCH Cold Springs Plaza, Ground Floor Mobile: 0703 099 832 [email protected] EMBU BRANCH Sparko Building, 3rd Floor above Family Bank Tel: 0703 099 900 [email protected] MERU BRANCH Alexander House, 1st Floor Ghana Street Tel: 0703 099 930 [email protected] KAKAMEGA BRANCH Walia’s Centre, Ground Floor Tel: 0703 099 802 [email protected] ELDORET BRANCH Co-operative Building, 1st Floor Ronald Ngala Street Tel: 0703 099 660 [email protected] KISII BRANCH Lengetia Place, 2nd Floor Kisii-Kisumu Highway Mobile: 0703 099 700, 0703 099 701 [email protected] BUNGOMA BRANCH Simali House 1st Floor, Moi Avenue Tel: 0703 099 870 [email protected] KERICHO BRANCH Imarisha Building, Ground Floor Tel: 0703 099 650 [email protected] KILIFI BRANCH Al Madina Plaza, 1st Floor Mobile: 0703 099 718 [email protected] MOMBASA BRANCH MTC North Tower Mezzanine Floor, Nkrumah Road Tel: 0703 099 751 [email protected] KITALE BRANCH Mega Center, 1st Floor Mobile: 0703 099 951 [email protected] BOMET BRANCH Isenya Building, 2nd Floor Mobile: 0703 099 650 [email protected] REGIONAL OFFICES CIC SOUTH SUDAN CIC Plaza, Plot 714B-3K-South, Kololo Mobile: +211 0954 280 280 [email protected] CIC UGANDA AHA Building, 2 Floor, Lourdel Rd Mobile: +256 200 900 100 [email protected] CIC MALAWI Musco House, Area 3, Lilongwe Mobile: +265(1) 751 026 [email protected]