The company entered the Kenyan market in 2014 and since then, it has fulfilled its promises by honouring claims, besides launching innovative products focusing on customer needs
The entry of the British multinational life insurance and financial services company, Prudential, into the Kenyan market in 2014 was set to stiffen competition, pitting leading insurance companies and brokers.
Founded in London, United Kingdom, in 1848, today, the company has a footprint in Africa, Europe, Asia and the United States.
Prudential is the biggest UK incorporated and regulated life insurance company, and one of the oldest insurers in the world.
“What we are proud of is that for 170 years,it has always been Prudential; it has never been through a name change, and has maintained the same standards and values since incorporation” says Andrew Greenwood, the company’s chief operating officer, Africa and chief executive officer, Kenya.
“Today, we serve more than 26 million customers in the four continents, and have Sh 93 trillion assets under management as at end of 2017,” he reveals.
Furthermore, Prudential employs over 24,000 employees and 600,000 agents across the world.
“In 2014, learning from the lessons of the success of our business growth and development in Asia, the group felt that it was time to re-enter the African insurance market.” Prudential previously operated only in South Africa as asset managers.
The company entered the Kenyan market in the same year through the acquisition of Shield Assurance and since then, it has invested over Sh 2 billion and Sh 3 billion in the East Africa at large. It has branches in Nairobi, Nakuru, Eldoret, Mombasa and Kisumu.
So far, Prudential has entered four other markets in Africa – Ghana, Uganda, Zambia and Nigeria. It partnered with a Nigerian bank, Zenith plc, to set up life insurance business in the country.
Greenwood says at this stage, they are consolidating what they have and looking for new opportunities in other markets. They also plan to expand in the markets they are already operating in, in terms of product offering and physical presence.
The CEO says Prudential sells a promise and makes sure they stick to past promises as it helps in building trust among customers.
“We took over all the Shield life insurance policies and committed to fulfill the promises made to those customers,” says Greenwood, adding that, “Since the acquisition of Shield Assurance, the company has paid over 22,000 claims worth KSh. 566 million.”
Often, with little or no customer contact details on file, Prudential’s staff and agents have been contacting older employers, speaking with friends, colleagues and neighbours, to find customers and pay them their benefits, something the CEO says is a great source of pride of achievement.
“We spent some time to find out what customers needed and what was available in the market. Since then, we’ve come up with three innovative products uniquely built around the Kenyan family life,” observes Greenwood.
In 2016, Prudential launched PruMemorial, a unique last expense cover for the wider family.
It covers the extended family including spouses, parents, parent’s in-law, children, nephews, nieces, aunts, and uncles among others. It’s upon the main member to decide which family members they wish to cover.
An individual chooses between three plans offering different cover levels depending on the needs.
It’s a low cost product with a minimum premium of Sh 500 per month.
According to Greenwood, PruMemorial is very flexible and it covers both natural and accidental death, as well as accidental disability. Claims are paid within 48 hours upon filing.
The second product is PruSuper7, which is basically designed around, but not limited to, education. It is a unique savings product with a seven year payout structure.
It allows members to takes a policy of between 10 to 30 years. Prudential however, pays yearly installments in the final seven years of the policy, meaning that members need not wait for the policy to mature in order to start receiving payout benefits.
Furthermore, in case of permanent disability, critical illness or death of the principal member, the company steps in and provides a range of benefits to ensure that members still achieve their set objectives if these cover options are selected.
Finally is the recently launched PruDahari-Dumu, the first product in Kenya with a “Never Lapse” guarantee.
The innovative “Never Lapse” feature means that policies beyond the first six months will never lapse or become inactive. When it comes to paying benefits to the customer or their family, either at maturity or at the claims stage, the payout will be pro-rated based on the overall contribution.
According to the Association of Kenya Insurers (AKI), one in three life policies in Kenya lapse in the first year. By the end of the third year, six in ten have lapsed. It means when the customer stops paying the premium, the policy comes to an end, leading to loss of savings built-up within that period.
“While developing the product, we looked into ways where the premiums could be a bit more flexible for customers.”
In principle, PruDahari-Dumu is a protection plan that provides life insurance cover and savings. The policy term runs for 5-10 years.
As an additional benefit, if a customer pays 11 months of premium in time in a year, they get the 12th month free. Furthermore, if a customer stops paying because of other obligations or unforeseen events, they can catch up at no extra cost.
In less than four years, Prudential has identified the needs in the Kenyan market, and designed innovative products to meet them.“With the understanding that not everybody has a bank account, salary or a regular stream of income, we have come up with ways to allow customers to buy insurance when they can afford to, and it doesn’t run out when they cannot afford to,” offers Greenwood.
The company’s focus on its customers also sets it apart from the rest. “We’ve gone out and spent money, looking for 22,000 people to pay claims to.”The company went an extra mile to look for its clients through advertisement, direct calls and personal visits just to settle their claims. It is in line with Prudential’s philosophy: ‘The claims we pay today, secures our customers for tomorrow’. It is based on the fact that we are selling a promise – Which takes courage to believe in.
Kenya is the 4th most penetrated life insurance market in Africa, with South Africa coming first. However, the life insurance penetration is about 1 percent, which is very low by international standards. It is double digits in South Africa and approximately 12 per cent in most European markets.
Some of the challenges for this low uptake include a low understanding of what life insurance is all about. Greenwood says it is a very sophisticated financial product that requires much understanding to pass it on to others. To deal with this, Prudential uses user friendly words in its policy documents.
The company also works with AKI to create product awareness.
Furthermore, Prudential has over 500 people across the country selling the insurance products, and plans to double the number in the next few years.
Despite the tough economic climate in Kenya, Greenwood says there is an emerging middle income group of people who are interested in the kinds of insurance productsthey have designed. There are also products that are sold to groups of people in the informal sector and big collective organizations.
“I have no doubt that there is a need for life insurance products in the market, but we need to provide more education for customers to understand on the best ways to invest,” he concludes.