[Kenya] Middle Income Driving Motor Insurance in the Country
Motor Insurance industry in the Country has experienced a recognizable growth within the last two years. Optimists would say that it is as a result of the increasing middle income in the country, but this alone is debatable considering the increasingly high cost of living.
According to the Insurance Regulatory Authority Q4 industry report, the general insurance business in the country grew by 3.5 per cent, a factor that mostly driven by compulsory motor insurance.
Reached for comments, Kennedy Misati, Chief Manager-Central Claims Hub at Kenindia Assurance Company averred that as much as the majority of waged employees are low-income earners, the middle-class earners are increasing by numbers and are consequently a significant contributor to purchase of motor vehicles in the country. “There can be a debate at what actually is the number of Kenya’s population in the middle class but one thing is for sure, the numbers are on an upward trend and they are going for finer things including owning a car,” he said.
Migration to urban centres around the country as a result of either push or pull factors has also fuelled the number of shuttles we see in our roads in the recent times as demand for transport is always in the rise.
Lastly, fair accessibility to credit is also a major factor that has increased the uptake of motor vehicles in the country. Traditional banking financing has often not been readily available, or flexible, whilst private equity markets are still relatively under-developed in the country. Easy access to credit facilities at relatively cheaper interest rates has led to an increase in motor vehicle purchase.