Recent regulatory changes by Kenya’s Insurance Regulatory Authority that require an increase in the capital of insurance companies and the separation of life insurance business from general business could negatively impact the reach and volume of microinsurance in Kenya.

Insurance products marketed to the low-income population in Kenya are generally bundled to include coverage for life, health, personal accidents and funerals. Regulation which separates life insurance from general business could decrease the attractiveness of insurance to poor people.

Additionally, the new regulation increases minimum capital requirements to KES 300 million (USD 3.6 million) and KES 150 million (USD 1.8 million), for life and general insurance companies, respectively. These increases may result in fewer insurers participating in the market, which would likely increase costs and limit product choice.

By Jennifer Shevock, Research Associate

About the Insurance Regulatory Authority (Kenya):
The Insurance Regulatory Authority regulates, supervises and encourages the development of the insurance industry in Kenya. The department is charged with administering the Insurance Act, advises the government on policy matters and aims to protect the interests of policyholders.

Sources and Additional Resources:
“New regulations seen hurting micro-insurance” July 29, 2010. http://www.businessdailyafrica.com/New%20regulations%20seen%20hurting%20micro-insurance/-/539552/966568/-/item/0/-/8emkc2z/-/index.html

MicroCapital Universe: Insurance Regulatory Authority: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Insurance+Regulatory+Authority+%28Kenya%29

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