Considered unmatched in their claims settlement record, underwriting expertise and quality of customer service, ICEA LION Group’s Steven Oluoch tells Africa Outlook about their biggest challenges and company developments.
A PROFESSIONAL REPUTATION
As it exists today, the ICEA Lion General Insurance Company is an outcome of a merger between ICEA Lion Limited and Lion of Kenya Insurance Company in 2011, which came into effect from 1st January 2012. Prior to the merger, the two companies were both fairly well known and significant players in the East Africa insurance market. The ICEA LION Group’s business consists of four distinct units namely General Insurance, Life Assurance & Pensions, Investment & Asset Management and Trustee services & Pension scheme Administration. The company is currently in operation across Kenya, Uganda and Tanzania. Africa Outlook spoke to the CEO of ICEA LION General Insurance Company Ltd, Steven Oluoch, to gain further understanding of the company profile.
“The reason for the merger was to consolidate the companies to create a bigger force whilst also establishing separate life and non life companies for reasons of specialised focus on core business, enhanced internal efficiencies, improved customer service and greater competitiveness in the market place. The two companies were owned largely by the same shareholder, so it did not make sense for the companies to be in direct competition with each other,” Oluoch explains. Merging the two disparate entities have created an outfit that would be better able to compete within both the Life and General spheres of the highly competitive Kenyan insurance market. With premium incomes of Kshs 6.45 billion ($ 74.9 million) and Kshs 4.5 billion ($52.3 million), both the Life and the General company currently stand in the Kenyan top five in terms of their size.
Although the law has not yet specifically required composite insurance companies to segregate their businesses, ICEA LION have been proactive, meaning they have already embraced the Government’s stated intention. The General Insurance company deals in Motor, Property, Engineering, Aviation, Marine, Personal Accident covers, Domestic or Home packages, Liability, Employee, Bonds, Agricultural risks and Travel among other non life classes. The Life Assurer on the other hand offers Ordinary Life, Group Life, Group Pensions and unit Trusts products.
COMPETITION IS A TOUGH MARKET
After attaining 15 per cent growth on last year, the general underwriter, and indeed also the life assurer, communicates a professional outfit that does not compete on price. Oluoch explains: “There is a cut-throat culture in this market, but we are driven more by the bottom line. With 37 non life underwriters battling for a piece of pie that is limited in both size and growth, we are especially keen to show a clean sheet to our shareholders at the end of each day, even at the cost of rapid top line growth and market share. Profit before tax and optimal return to the shareholder, driven by a technically prudent but economically sustainable underwriting philosophy is our key concern.”
Mr Oluoch highlighted three specific challenges that ICEA Lion’s General Insurance department tackle on a daily basis. Firstly, that the market is over saturated: “our market grows at an average rate of about 15 per cent and there is a lot of unhealthy competition that emerges, inevitably resulting in over capacity and price wars.”
Secondly, he outlined Kenya’s low penetration rate into this saturated market: “We haven’t made the breakthrough in the minds of insurable Kenyans that we think we should have. Kenya still has a relatively paltry penetration rate of 3 per cent for general business, in comparison to 12 per cent in South Africa.” This challenge is however, is felt right across Africa as the rise in the cost of living means that significant amounts of the population are below the poverty line. “Obviously, the income that people have available to spend is assigned to more urgent needs, insurance is understandably not a priority for most.” Lastly, insurance companies tend to have a negative reputation in the mind of the general public; some are known for taking your money but are never there to pay your claim when it happens. Mr Oluoch believes that with the right public education on the benefits of insurance and more professional conduct by insurance companies, the third challenge can be tackled efficiently: “There is still a need for public awareness and education of our services, and African Governments should have a role in enforcing this.”
GIVING BACK TO THE PUBLIC AND EMPLOYEES
Even with these challenges in mind, ICEA LION feel there is also a need to give back to those who make their company operations possible. “It is not enough that we should only take your money and live by our contractual obligations when these arise, we also strongly feel that we owe society a bit more than providing cover.” In recent years, the Group has sought to become more engaged with communities by supporting multiple charities. Among them, those championing cancer, epilepsy and child education causes, in an act of moral obligation to improve people’s situations. Additionally, for the last two years they have partnered with KCB Safari Rally to showcase their “sporting side,” while also creating awareness for road and public safety as an integral part art of this sponsorship as Mr Oluoch reasons: “Our business objectives are appropriately intertwined with our Corporate social responsibility.”
Furthermore, Oluoch takes great pride on the quality of his company and Group’s workforce, stating: “Staff are definitely our greatest resource, we do not take their coming to work for us for granted. We are deeply committed to furthering their skills and nurturing their talents because the better skills and qualifications they have, the higher the chances that it will lead to good things for the company.” Committed to developing his workforce, Oluoch also offers a range of graduate internships for promising young entrepreneurs seeking potential employment. “These fresh graduates are the ones who will hold the reins of the company in the future. We want to be the employer of choice for them, and not only that, in offering these internships we want to attract the best brains out there.”
THE MEDICAL INSURANCE MARKET
ICEA LION is always looking into new possibilities for expansion, and whilst their medical business is currently limited, this is an area they consider to come with a level of risk. “We offer medical cover mainly for corporate clients who have been on our books for a long time, but this is purely on accommodation basis. However, it should be noted that we presently provide medical cover for the members of Parliament and the senate, which is a high profile and sensitive account, and one that clearly demonstrates our technical competence to write medical business even at this stage.” Oluoch elaborates further: “To us, the market is still very much unstructured, with high risks of fraud and difficult to control medical processes and related expenses.
We do not think that the administrative systems currently in place will ultimately help the running and administration of our company. Once we establish that the dynamics have positively changed in this market and the costs are controllable, then we will be able to venture into it in a significant way. We are as passionate about growth as anyone else would be, so it is something we are seriously considering in the future.”
A ONE-STOP-SHOP FOR QUALITY
Following the recent merger, ICEA LION aspires to emerge as the undisputed leading provider of insurance and related financial services in the region based on the company’s reputation for professionalism, probity and reliability. Oluoch clarifies: “Everything that we do is tied to this vision. This will entail extending our footprint from Kenya, Uganda and Tanzania and providing further services to other regions. This is a way of guaranteeing growth beyond our traditional boarders and raising our profile.” In order to achieve this, the Group is currently strengthening its internal resources, which includes the implementation of state-of-the art IT systems, a crucial innovation for any emerging company. “We have spared no expense to put these new systems in place. Plus, we are working on expanding our product distribution channels and have also recently set up a research department to work with our business development teams, in order to come up with tailored products for clients, among other objectives.”
ICEA LION is highly reputed for professionalism in the Kenyan market. They have arguably the biggest bank of insurance professionals in any one company, through hiring suitably qualified staff with diplomas in insurance. Well-known for integrity and probity, Oluoch proudly proclaims: “Our Group’s claims settlement record is unmatched.”
