RESOLUTION INSURANCE
RESOLUTION INSURANCE
Resolution Targets
Emerging Consumer
PRODUCTION: David Napier
Nairobi-based Resolution Insurance is looking past the current economic woes in Kenya towards a bright future. It is developing new product lines and investing in new technologies to continue ‘protecting what you value’, with customer service of the highest level.
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The Kenyan economy has been hit by an air of negativity in recent months. Political uncertainty has caused havoc across the country and as people wait for political issues to be resolved, investors are taking money elsewhere. The Secretary of the Treasury said recently that growth projections were set to be revised downwards and all were hoping that there is no repeat of 2008 where, after a disputed election and
in a poor global economic climate, growth fell to just 1.7% compared to 7.1% the previous year. The Kenya National Bureau of Statistics (KNBS) said recently that the economy expanded by 5% year-on-year in 2017’s second quarter compared with 6.3% in the same period in 2016. But even during these challenging times, businesses that are set up in the correct way and are experienced in dealing with different
market conditions can not only survive but thrive. In the insurance industry, Kenya’s Resolution Insurance is growing its portfolio and attracting more customers each year. “These periods of time are when people need insurance so people are still buying,” says Managing Director, Alice Mwai. A subsidiary of the Resolution Group, a leader in East Africa’s
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INDUSTRY FOCUS: INSURANCE
RESOLUTION INSURANCE
insurance sector, Resolution Insurance provides an individual and commercial product portfolio with its roots in medical and health. Mwai says that economic turmoil has had some impact on the company’s progress but not enough to cause serious concern in the board room. “There is certainly some slowdown” she says, “we’ve seen the stock exchange lose value over time. Last year, a law was passed to cap interest rates and so we’ve seen a credit squeeze around banks’ lending to small businesses and individuals and that has impacted on our customers’ ability to buy. We’ve seen some clients reducing the benefits they want to buy and delays in payment of premiums but it’s not been significant.” In fact, Resolution Insurance is growing its reach, introducing new products, reaching out to new segments in the market, and, at group level, expanding into new geographic territories. Already active in Tanzania and with previous experience in South Sudan and Uganda, Mwai and Resolution see big opportunities in the East African region. GROWING BUSINESS “I am growing my business within the boundaries of Kenya but I think we are certainly looking at going into new markets, but new markets that are stable. We know where we sit in the East African markets and we know where is stable and where is not, so we will look at the trajectory of the markets around us and see where would be good for investment.” Currently, Kenya’s insurance penetration rate sits at around 3%, far from the figures achieved in more mature markets identifying opportunities for local growth. 15% of the world’s population lives in Africa, yet the continent remains largely underinsured and the industry remains under-developed outside of a few major African powerhouse economies, signalling opportunities for quality businesses to expand.
Resolution has recognised these chances and is busy creating new products to fit gaps in the market. “We’ve got new products lines that have been released in the past two years surrounding car and motor insurance,” explains Mwai. “We’ve always done workmen’s compensation insurance and that dovetails very nicely with the medical side of the business, especially when you’re selling to corporate entities and big employers. The government of Kenya recently passed an insurance law demanding that all ports must buy marine insurance locally so that is one of the products we have developed. We have invested so that customers can do this digitally – we have an online platform through which purchases can be made. “The other products that we have worked through are typical small business insurance, covering assets in the office, fidelity for employees, and anything that a small business would require and for us that is key because we largely play in the SME and individual family space. “Another area that we want to go into, and an area that we are busy with pilots and research just now, is with the emerging consumer. This is someone we define as having not purchased insurance before but someone with buying power who perhaps hasn’t seen products packaged correctly or been attracted by suitable payment plans or doesn’t understand the language of insurance. We believe this is the next frontier for insurance in Kenya and across Africa.” It has been reported that insurance premiums in Kenya are not affordable for the majority of the population, regulation and legislation have been described by industry commentators as ‘weak’, and, crucially, many regard the industry as incomprehensible, not being able to make sense of the language involved. Mwai says that Resolution is always innovating new products and coming up with ways to simplify communication
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INDUSTRY FOCUS: INSURANCE
in an attempt to break into the ‘emerging consumer’ market. “There is still an element of ‘grudge purchase’ surrounding insurance in Kenya,” she admits “We must not forget that insurance in Kenya is purchased by someone who has the resources to own a car, a house, and other big purchases - it is not always a priority for people. There can also be a lack of trust as when people need to make a claim, they can be handed a 30-page, highly detailed document to read and then find out their claim cannot be paid. We must simplify our language, try during product development to reduce exclusions in a policy, and try to minimise complications for customers.” TECH INVESTMENTS An important focus for resolution over the coming months will be investment into technology in order to streamline and smooth out communication issues. All of this will aid companies in their interaction with consumers and industry partners and ultimately improve productivity. “Insurance companies in Kenya have lacked behind in back office systems related to underwriting, claims management and payments so the industry is now investing into this,” explains Mwai. “There’s also a lot of investment into communication and accessibility for the customer to help them buy and report easier. There’s also investments looking into customer experience and CRM. Over time, there will be investments into data and claims data interchange. Currently, we receive medical insurance claims and medical reports in paper form so we are looking at interconnectivity with hospitals to receive information digitally. This will improve efficiencies and turnaround times.” Research suggests that in 2016, around 10 million medical claims were received by private insurance companies in Kenya. However, these claims were accompanied by mountains of paperwork - often several
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invoices, medical documentation, doctor’s notes, etc. all of this paperwork must be manually input and checked by the insurance company and this can cause slowdowns and errors. Automation and the development of digital systems could vastly and quickly improve this situation. In August, Resolution Insurance announced a MoU with a group of speciality hospitals in India to offer Resolution members direct access to an array of advanced care including cancer, organ transplants, cardiac and orthopedic treatment services. This follows the announcement from the Ministry of Health which suggests that a growing number of Kenyan’s are travelling abroad to seek out highquality but affordable healthcare. Moves like this are exactly what has given Resolution the reputation of being innovative and creating industry benchmarks. HISTORIC SUCCESS Resolution Insurance owes much of its current success to a long and inventive history. Founded in 2002, the business was originally named Resolution Health focusing only on medical insurance. “The company was formed by our founder and director Peter Nduati with the support of other local shareholders,” explains Mwai. “Originally, we were largely targeted towards SMEs and families and that is how we grew through the years. We acquired a good name in the market thanks to the service we provided and the alternative products that we offered.” The company was the first to offer individuals HIV/AIDS, dental/optical and maternity covers. Thanks to a strict focus on customer service, Resolution’s reputation grew quickly and so a growth in the company’s employee base was required. “We grew our number significantly and we got to a point where we were the equivalent size to other insurance companies in Kenya and so the regulator was of the opinion that we
should be regulated as an insurance company. At that time, we had acquired a private equity fund as an investor who owned 25% of the business and we agreed to go into licensing as an insurance company in 2013. Getting into insurance licensing meant being regulated like any other insurer who was not just undertaking health insurance but was active with all types of shortterm insurance. “After getting our licence in 2013, we needed to diversify because health insurance is a high-loss ratio business compared to other types of insurance business and the regulator will look at you and say ‘you have a concentration risk with your portfolio mix’ so we had to diversify quickly. Regulation here is changing from a compliance-based framework to a risk-based framework and this means that some products require more capital and health is one of those. From a return-on-investment and capital employed perspective one needs to diversify to have products that are not so capital intensive coming into the book.” Today, health and medical remains the core business for Resolution but its portfolio includes travel plans, liability plans, property covers, motor covers and all other classes of general insurance. Mwai, who has been with Resolution for 13 years and who has worked her way through the company’s ranks, says that good customer service is what will help drive future business. “We have clients that remain with us and we want to continue servicing them. We’ve done a good job of it and we wouldn’t want to lose that competence. For us, the biggest drive is make sure we keep our customer experience up and keep our losses as contained as possible so that we can make returns on our investments.” Only taking the position at the top of Resolution Insurance in Kenya last year, Mwai admits that the role has its challenges but remains gratifying. “I’ve had to do a lot of training to develop
RESOLUTION INSURANCE
my skills in different areas – things like communication, public speaking, I’ve started doing by ACII so that I have the papers to show I’m an insurer, I’ve completed my MBA, I’ve worked with change management to ensure I can look after different situations, I’ve gained a good understanding of the role of technology in business; but most importantly, I’ve learned about keeping costs down and ensuring people are moving towards the same goal. “It hasn’t been easy but I enjoy what I do, I enjoy seeing something grow from nothing to something. One of my biggest achievements will be when we have set up the general insurance side and hitting the numbers with diversification. We’re significant in health insurance and we have a strategic objective to be 50/50 in three or four years and we are well on the way to achieving those targets.” PEOPLE POWERED Traditionally an industry where vacant positions can be hard to fill with talented, experienced people, the insurance business requires investments into training and development from organisations that want to thrive. Resolution has long recognised this and continues to work so that its team is the best in the industry. “We have around 220 in operations and around 300 sales agents,” says Mwai. This large team has helped the company drive sales and acquire market share. “Traditionally, insurance companies in Kenya have distributed through large brokers but we have signed up small agencies and individuals selling insurance and set up an in-house team of insurance sales agents, and that has helped us to grow our market share over time,” she adds. Development of a strong team with a commitment to company culture and values has seen Resolution awarded a number of accolades in the past two years including commendations for customer service, training, innovation, marketing and customer satisfaction.
“Finding good underwriters and good sales managers is difficult especially someone who can work with a large corporation with large premiums and equally with the emerging consumer where unit premiums are very small. Finding a sales manager who knows the industry, who is tech savvy and who can manage a large pool of people is challenging. We do train, and sometimes we lose people, but it’s an ongoing investment and to date has not stalled us in any way,” says Mwai. Resolution Insurance has the strategy, the products and the people, and its ambitious leader has eyes set on taking more and more market share in Kenya. Despite the economic outlook which has caused much business confidence to fade, Resolution Insurance continues to thrive and innovate, positioning itself perfectly for future growth.
“We have an ambitious strategy plan, we are in the process of raising capital to comply with new regulations, and we are excited about the opportunities with the emerging consumer space. We do have challenges, especially surrounding fraud, but we are excited about the space and time that we are in,” concludes Mwai.
RESOLUTION INSURANCE 254 709 990 000 info@resolution.co.ke www.resolution.co.ke
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Issue No.64
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A S F E AT U R E D I N
ENTERPRISE AFRICA
OCTOBER 2017