Kenya’s 10,200 insurance agents face a bleak future as the Treasury pushes on with legal changes that could scrap their role and strip them of a profession.
Treasury Cabinet Secretary Henry Rotich wants Kenyans to start procuring insurance directly from the service providers, saying the intermediaries have been delaying premium payments, leaving customers exposed.
At the moment, the Insurance Act recognises the intermediaries, allowing them to receive premium payments, which they hold before releasing to the insurance firms. The industry has 10,000 agents and 200 registered brokers.
“The intermediaries delay the payments for the premium thereby putting the insured at risk.” Mr Rotich said Thursday in his Budget statement.
“In order to ensure prompt payment of premium to the insurer and taking into account the expanded mode of payment of premiums, through digital platforms, I propose to amend the Insurance Act to require the insured to make payments in respect of premiums direct to the insurer,” he said adding the legal changes would enhance prompt coverage of the insured.
The proposal portends a final blow to intermediaries who have been fighting to defend their space from intrusion by new players.
Through their national lobbies, the Bima Intermediaries Association of Kenya (BIAK) and the Association of Insurance Brokers of Kenya (AIBK), they have been fighting to protect their turf.
“The proposals don’t make sense. If you remove intermediaries … you end up hurting insurance penetration, which is already low,” said BIAK chairman Washington Ndegea.