| dc.description.abstract | Over the last 10 years there have been many changes in the Kenyan economy. These
changes have had a considerable impact on all industries and the life insurance industry
is no exception.
This research project was a census to determine the political, economic, social, legal
and technological changes that had taken place in Kenya and the strategies that the life
insurance companies had adopted to respond to these changes. In order to achieve
these objectives, a questionnaire was mailed to all the companies licensed to transact
life insurance business in Kenya. Economic recession, inflation, poverty, political
instability and uncertainty, HIV/AIDS, income inequality between the rich and poor
people and urban and between rural areas, computerization, the Internet and mobile
telephony were identified as the major changes that had taken place in the country
during this period.
The study established that the industry had responded to these changes through such
initiatives as new product development, development of new distribution channels such
as the Internet, organizational restructuring, investment in human resource
development and computerization of the core business processes. The study also
established that the low levels of life insurance penetration were caused by low levels of
disposable income, lack of awareness by the public on the benefits of life insurance,
poor image of the insurance companies and intermediaries and lack of government
incentives to the insuring public.
Despite these challenges the study established that life insurance is an attractive
industry. However, of the three lines of life insurance business, that is individual life,
group life and pensions, it emerged that the latter two lines of business are less
attractive than ordinary life insurance business.
Finally, the study established that there were structural and legal impediments which
needed to be overcome before the industry could develop and achieve a high
penetration ratio. Such impediments include composite licensing, a weak industry
regulatory framework and the taxation regime.
Further research on the (ndu5try can be undertaken by rrreerrs: or a cross sec/:iona/
survey on strategic responses by the major life insurance companies who control
significant market shares or by means of a census survey on strategic responses for any
one of the three classes of life insurance business, namely ordinary life insurance, group
life insurance or pensions. | en |
