Must Read:CIC Life Assurance: Securing Your Future

• CIC Life Assurance: Securing Your Future;

2024 was a year marked by economic strain and financial uncertainty for many households. A combination of rising taxes and a challenging economic climate led to a significant decrease in disposable income, leaving families struggling to make ends meet.

The increasing cost of living further exacerbated these challenges, making it difficult for individuals to prioritize long-term financial security through savings and insurance.

According to the Insurance Regulatory Authority (IRA) and the Kenya National Bureau of Statistics (KNBS), 2023 Economic Survey, insurance uptake in the country has significantly remained low compared to other key economies with the insurance penetration at about 2.3 percent.

The record is still below the global average set at seven percent.

Additionally, a recent report by the Central Bank of Kenya (CBK) and KNBS, shows Kenyans are facing increasing financial strain as it reveals a concerning trend in the country’s saving culture and loan appetite.

Dubbed the ‘2024 FinAccess Household Survey’ the report highlights a significant decline in savings habits this year. The report further notes that savings among Kenyans have declined for the first time since 2009, attributable to financial constraints and loss of income.

However, financial experts have continued to stress the importance of insurance, particularly life insurance, to ensure loved ones are protected against unforeseen circumstances.

Ideally, life insurance provides a vital safety net, helping families to cope with the financial burden that can arise from the death of a breadwinner or serious illness.

Geared towards helping Kenyans navigate through challenging times while at the same time ensuring they derisk the unforeseen future hurdles, is CIC Life Assurance, a subsidiary under CIC Group, and one of Kenya’s leading insurance providers. As of December 2023, the firm stood out as the market leader in the country in Group Life business, with a market share of 16.9 percent.

The Gross Written Premium for Group Life Business alone in the period under review was Sh6.3 billion.

To cushion Kenyans from the prevailing tough economic times, the firm is stepping up to support Kenyans by offering more affordable cover solutions.

Recognizing the financial pressures facing many households, CIC Life Assurance Managing Director Meshack Miyogo during a sit down with the Business Quest, said the firm has made a strategic decision to cut down its premiums, going down to as low as Sh2,000 for life customers.

This is compared to the industry’s average of about Sh2,500 per month, or Sh30,000 per year.

“Through this, we seek to make life insurance more accessible to a wider population and to alleviate some of the strain on families while still providing the essential coverage needed for peace of mind,” Miyogo said.

“The move to lower premiums comes at a critical time, as many Kenyans are opting for more cost-effective ways to protect their families and secure their future.

CIC Life Assurance’s intervention is a timely response to the current economic climate, where budgeting for life insurance may seem like a luxury to many.”

Part of the strategy entails lowering the premiums to encourage more people to consider their financial well-being in the long-term by investing in life insurance which remains an essential tool for protecting loved ones, he added in part.

Nevertheless, he noted that the initiative, specifically during such times, is a reminder of the importance of planning for the future, and reiterated how insurance can serve as a crucial safeguard in the face of economic hardships.

Company Growth

CIC Group has a significant presence across East Africa, with subsidiaries in Uganda, South Sudan, and Malawi. As a publicly-listed company, the company offers a diverse range of life insurance solutions tailored to individual and group needs.

In Kenya, CIC Life is a top-five player in the market, particularly excelling in group life insurance. The company is actively expanding its product offerings, including individual life policies, education policies, annuities, investment products, and pensions.

One of CIC Life’s most popular offerings is the CIC Academia solution, designed to address the growing concern of future school fees.

“For individuals without children or those with grown-up children, CIC Life offers the Smart Saver and Invest Plan. These products prioritize protection, providing peace of mind and financial security to policyholders,” Miyogo notes.

The company also offers compensation to beneficiaries in case of critical illness and permanent or total disability coverage in a majority of the life products to cushion families from unfortunate events which may affect the breadwinner. Additionally, it provides pension solutions to individuals and groups. The CIC Jipange Pension Plan allows for flexible contributions and has consistently delivered strong returns, ranking among the best in the industry with a current return of 10.75%.

“We are committed to providing our customers with innovative and reliable life insurance solutions,” said the CEO. “Our focus on protection, investment, and retirement planning ensures that our customers have the financial security they need to achieve their goals.”

The company’s life business currently generates approximately Sh5.6 billion in annual premiums.

Additionally, CIC Life has introduced flexible payment terms to ease the financial burden on customers.

The insurer has extended the payment period for some of its customers which has reduced their monthly premium to affordable amounts.

Technology

CIC Life is prioritizing digitization as a key strategy to grow its individual life insurance segment. The company has made significant strides in this area with CIC M-bima platform, which allows customers to purchase life insurance policies entirely digitally, eliminating the need for paperwork. To further enhance its digital capabilities, CIC Life has invested in new IT systems to support a robust digital distribution model.

“Partnerships are also a crucial component of CIC Life’s growth strategy. The company recognizes the importance of strong partnerships with its staff, who are essential in delivering services to customers. We are committed to creating a supportive work environment for our employees to ensure optimal performance,”.

In addition to internal partnerships, CIC Life has forged strategic alliances with various external partners, including Saccos, banks, religious organizations, brokers, financial advisors, and independent agents. The company is particularly focused on expanding its partnerships with Saccos, having established over 60 partnerships nationwide.

Headwind

Miyogo reveals several critical challenges facing the insurance industry, with perception being a primary concern.

“The public often holds a negative view of insurance, exacerbated by the issues frequently reported within the sector,”

Another significant challenge, he says, is customer experience, adding that many customers have encountered negative interactions with insurance companies, leading to widespread distrust.

“This is particularly evident when claims are denied, sometimes legitimately due to issues such as fraud. Fraud remains a persistent threat within the industry, and when fraudulent claims are declined, disgruntled customers often publicize their dissatisfaction publicly, further influencing perception,” he says.

To address the issue of fraud, Miyogo emphasizes the implementation of a robust internal system where staff members are thoroughly trained to recognize and manage fraudulent activities effectively, and where consequences for any wrongdoing are enforced.

Steering Toward Growth

For Meshack Miyogo, the Managing Director of CIC Life Assurance, a key priority is the welfare and growth of his staff. He firmly believes that the success of the organization is connected with the personal development of its employees.

“We have provided an environment where employees can achieve their personal goals, as a result CIC Life naturally moves toward fulfilling its corporate objectives,”

Miyogo credits CIC’s turnaround to the commitment of the staff, along with steadfast support from the board and management.

Reflecting on his journey in the insurance industry since his transition from banking in 2010, Miyogo notes significant changes and steady growth in the sector.

For CIC Life, the past year has been marked by expansion in pension solutions, group life, and individual life insurance.

Despite initial challenges in the individual life insurance segment, CIC Life has made remarkable strides. In 2023, the firm achieved a milestone by selling the highest number of individual policies as recognized by the Association of Kenya Insurers (AKI) Award, positioning itself as a major player in the market.

Looking forward, Miyogo’s ambition is clear: to make CIC Life the most profitable life insurance company in the industry. The company currently ranks among the top four in profitability, reflecting its sound strategies and commitment to sustainable growth.

On the question of whether bancassurance presents competition to conventional insurance, Miyogo offers a balanced perspective. He views bancassurance as a complementary distribution channel rather than a threat. While some banks have ventured into establishing their own insurance firms, CIC Life remains confident in its competitive edge.

Miyogo offers valuable insights to the next generation of business leaders indicting that integrity is crucial.

“It is the foundation for running a successful and profitable business. Without integrity, profitability and employee well-being become unattainable,”.

He adds that professionalism in execution is essential as they operate in a dynamic environment where regulatory compliance is critical and as a leader, they must prioritize compliance.

“Without it, running a business becomes impossible. Finally, if you don’t put your people first, your vision will fail. Leadership is about being visionary, but that vision is driven by your team. Nevertheless, I encourage leaders to focus not just on creating followers, but on developing other leaders.

When you cultivate leadership, you achieve far more,”.

Under his leadership, CIC Life Assurance is well-positioned to continue its trajectory of growth and industry leadership.