GA Insurance is one of the oldest insurance companies operating in Kenya, underwriting all classes of general insurance, including medical and travel.
POISED FOR GROWTH
The Kenyan insurance industry recorded 15 percent growth in the fi rst half of this year, with premiums growing to $744.7 million from $647 million in the same period last year.
But, despite the growth, with an increasing number of people buying insurance, penetration is low and the result is that competition in the industry is fierce as licensed companies compete for a limited market.
Kenyans’ uptake of insurance cover, both at corporate and personal level, remains predominantly in the motor, fire industrial and personal accident (mainly group medical cover) classes.
“The main issue affecting us and the industry in general is the unhealthy competition and lack of self-discipline among players,” says Vijay Srivastava, CEO & Principal Officer, at GA Insurance. “The companies are too many for a relatively smaller market. The penetration and awareness of insurance is poor. The imbalance between a regulated and free market is a challenge. The crime related claims are always on rise besides the motor and Employers Liability legal claims and the industry is struggling to reduce the fraudulent claims especially in the motor classes.”
GA Insurance is one of the oldest insurance companies operating in Kenya, underwriting all classes of general insurance, including medical and travel.
Formerly known as General accident Insurance Company of Kenya Limited, having its parentage from General Accident Insurance UK, it was incorporated as a Kenyan insurance company in 1979.
In 2006, the company was acquired by the present owners, who also own the renowned I&M Bank Group in Kenya with interests in banking, insurance, beverage bottling and real estate. With new ownership and new management, the company’s profile changed and it has been growing consistently since 2007, maintaining a growth of over 25 percent each year. This resulted into repositioning of the company in the Kenya market and prompted it to rebrand in 2009.
“Presently GA is the most promising and one of the leading companies in the market. It has grown considerably since 2006,” says Mr Srivastava. “GA’s key strength is its people, the work culture and quick adaptability for achieving excellence. We are selling solutions to customer needs and creating viable options in the market. The reputation of the shareholders of the company and synergy with I&M Bank Group give us a lot of credibility and good standing. We work with the dual responsibility of living up to GA and group’s brand.”
The GA brand is recognised as one of Kenya’s most reputable insurers. Srivastava says the people in the company have been “literally living the corporate values to make it a sustainable brand” and that GA has been “focusing growth with profitability towards long time sustainability”.
“This led the company to develop one of the strongest financials in the market in terms of top and bottom line, assets, net equity, large investments and high solvency margin,” he says. Over the last year GA has recorded premium income growth of over 30 percent.
Profits are also up. And new ventures have been launched.
“This year we opened the GA Life Assurance Company having 100 percent ownership of GA Insurance,” says Srivastava. “GA Life got licensed in June this year and has made a very promising beginning especially in the fund management, pensions and group life.” Of course, with things growing quickly, there are challenges.
“Handling the fast paced growth in business and maintaining good customer service and delivery are certainly two of them. We had the potential and ambition to make a difference in the market but the comfort is that we have much better services as a bigger company than what we used to have five years back. The pain of implementation of the core software system is now resulting in good services to clients.”
There is plenty of room for expansion, if you understand the needs and challenges of Kenyans, Srivastava says.
“Kenya’s insurance market has enjoyed average growth rates of between 18 and 20 percent and insurance supervision is changing from compliance based to risk based. The regulator is very active and has brought a number of guidelines for better governance of the industry. This has given us clearer road map in managing the company.”
Kenya also has a growing number of tech savvy young professionals and this too is impacting the business and leading to new channels of distribution.
“The new generation is more technology savvy with smartphones, internet and social media,” says Srivastava. “New distribution channels are coming up like Bancassurance, other agents like in travel/tourism with large number of loyal retail and corporate clientele, and increased use of credit/ debit and other smart cards. Increased risk awareness about terrorism and political violence and new finds in oil and energy are interesting also and will require specialised cover, capacity and an expert technical knowledge of the special insurance covers. We at GA have geared up to these new trends and are adaptable to the fast growing needs of the customers. We are selling travel insurance online and are in the process of making our website more interactive and of practical use to the customer for their convenience. We are already part of a bank and are developing the Bancassurance. We now have a Life company in the group and this will facilitate us to package many new innovative products along with the general and medical insurance covers distributed through Bancassurance. We are aiming into building our capacity and knowledge about the oil exploration and energy sector. We also have an integrated software system for both general and medical insurance. This enables us to handle the large volumes with controls and efficiency ensuring better customer services.”
GA dreams big. And it has paid off.
From a moderate $6.5 million GWP in 2006 it will close the year 2013 at about $36 million GWP.
“We recently finished our strategy meeting and have put in place a long and short term plan,” says Srivastava. “We are still looking for more high growth in business for the next three years in order to further improve our market share.
“We have a very high solvency margin, good growth and liquidity. Our investments are quite diversified and safe. We are making some new investments in real estate and regional expansion of our operations. After investing this year in GA Life Assurance in Kenya, we are very soon opening in Tanzania with 67 percent share of GA Kenya. We also have plans to expand into few more countries in East Africa.
“We always love to dream and implement it into reality. I will not ask for any shortcuts or easy deals that will make us complacent.”
GA Insurance was awarded General Insurer of the Year 1st Runner-up 2012 by Think Business earlier this year – a remarkable achievement given there are 38 general insurers in Kenya – and in 2011 it was named second runner up for Socially Responsible Corporate.
“We have been doing a lot of work in CSR by contributing two percent of our net profits every year,” concludes Srivastava. “We are focusing mainly in education, clean water and sanitation among others.”
