Equity Group's Grand Plan to Disrupt the Insurance Sector

Things on the Ground…

Globally, insurance penetration is a key indicator of financial security, and Africa has long lagged behind other regions in terms of insurance uptake. The average global insurance penetration rate is 6.8%, but Africa’s is significantly lower—around 1.34%. Kenya’s situation is equally concerning, with insurance penetration declining since 2019. In fact, less than 2% of the Kenyan population is adequately insured, highlighting a critical gap in coverage for individuals and businesses alike.

One of the main barriers to increasing insurance uptake in East and Central Africa is affordability. Many people in these regions face a tough choice between meeting their basic daily needs—such as food, healthcare, and education—and securing insurance coverage. This dilemma has left millions unprotected, unable to safeguard their homes, businesses, and families against unforeseen events.

Equity Group is seeking to change this narrative by disrupting the insurance sector, just as it did with banking decades ago. The goal is to make insurance relevant, affordable, and accessible to a broad demographic, particularly those who have traditionally been excluded from these services.

The Disruption:

Equity Bank’s approach to bancassurance, the sale of insurance products through a bank, is designed to overcome the barriers of cost and complexity that have kept insurance out of reach for many people. By leveraging its established network, including branches, agents, and digital channels, Equity Bank is making it easier for customers to access a wide range of insurance products.

Some of the key insurance products available to customers include:

1. Fire Insurance Policy: Covers damage to property caused by fire, a significant risk for homeowners and businesses alike.
2. Theft/Burglary Insurance: Protects against loss or damage due to theft or burglary.
3. Goods in Transit Insurance: Offers coverage for goods being transported, a must-have for businesses engaged in logistics and trade.
4. Machinery Breakdown Cover: Ensures that machinery and equipment are protected from unexpected breakdowns, reducing the risk of costly downtime.
5. Marine Insurance Policy: Offers coverage for goods transported via sea, air or inland waterways and rails, a vital product for businesses involved in international trade.

Additionally, Equity’s focus on affordable premiums has been a game-changer in making these products more accessible. Insurance premium financing, which allows customers to pay premiums in installments, is available at all Equity branches, agents, and through digital channels.

As Dr. James Mwangi, the Managing Director and CEO of Equity Group Holdings, puts it, "Equity is disrupting insurance and making it relevant." This disruption is not just about introducing new products; it's about making insurance a part of everyday life for people who have never had access to it before. Equity understands that in today’s environment—where climate change, economic uncertainty, and unforeseen risks are prevalent—protecting assets and livelihoods is just as crucial as building wealth in the first place.

By creating a more inclusive and affordable insurance ecosystem, Equity is giving people the ability to protect what they have worked so hard to achieve. This is particularly important in light of the current challenges faced by many in the region, including natural disasters, crop losses, and infrastructure damage. Yet, despite these risks, less than 1.5% of the population in Kenya is insured. Equity’s mission is to change this, making insurance accessible for all through affordable premiums, easy access via mobile and digital platforms, and a range of customized products designed to meet the needs of everyday people.

Equity’s recent accomplishments in the insurance space demonstrate the success of their strategy. In 2024, both Equity Bancassurance Intermediary Ltd and Equity Life Assurance (Kenya) Ltd were recognized as top achievers at the Insurance Awards, a testament to the impact Equity has had on the industry.

Moreover, Equity Bank was granted approval by the Insurance Regulatory Authority (IRA) of Kenya to establish a General Insurance Company, following the successful launch of Equity Life Assurance Kenya (ELAK) last year. These milestones underscore Equity’s growing influence in the sector and its commitment to expanding insurance offerings.