Madison Life Assurance to focus on untapped informal sector to improve penetration rate

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Mombasa and the Coast region is fast becoming a hot cake for insurance firms as the areas, previously slow in savings, now become centers of development activities.

Madison Life Assurance now seeks to take advantage of this situation to reap big as it looks for more clients from the region.

“We have been attracted by the opportunities we are seeing in Mombasa. Mombasa has been left behind in terms of savings. We said we have to come and change that narrative,” Madison Life Assurance managing director Githua Ngaruiya said on Saturday.

He spoke ahead of the kick-off of their road show that traversed the county and ended in Mtwapa in the neighbouring Kilifi county.

“By the end of this year, we want to have made an impact in people’s lives when it comes to saving,” Ngaruiya said.

The MD said development has been happening in different parts of the country more than in Mombasa and the Coast, leading to more money circulating in those areas as opposed to the Coastal areas.

This gave Coastal people less money to save and that is why the saving culture has been low.

“In the last few years, there has been a lot of development in Coast region and Mombasa. So, we are seeing Mombasa and Coast region rising. It is time to come and support this by encouraging savings,” Ngaruiya said.

Madison Group head of marketing Yvonne Tharao said time has come for Mombasa people to be uplifted in terms of securing their futures through insurance.

Tharao said insurance is no longer a luxury but a basic need for every person in Kenya today, adding to the list of food, shelter and clothing.

“Even when you have food and shelter, you will need to protect the food and the shelter,” she said.

“Mombasa had been left behind a little mainly also because our products are not sharia compliant. So when we go back to Nairobi, we will come up with sharia compliant products that fit Mombasa people,” Tharao said.

Ngaruiya said the penetration rate in the insurance sector is 2.3 per cent, which he said is still very low.

This is because the sector has not been able to get to the common mwananchi.

“We have focused mainly on corporates and parastatals. But today as Madison, we are here to talk to the common mwananchi.

“If we can get to the informal sector, through paying daily, just like they transact ion a daily basis, for everything they are doing, we can now increase pour penetration rate to where it should be. It should be seven per cent and above,” Ngaruiya said.

Mombasa and the Coast, Ngaruiya said, is their fastest growing region in the country.

To change the savings culture in Kenyans, Madison Life Assurance is now talking to individuals about saving some little money daily as opposed to saving a lump sum at the end of the week or the month.

“In the past, we used to talk about saving something at the end of the month. But this today is difficult. It is more difficult to put away Sh3,000 monthly than putting away Sh100 daily, especially for those who earn daily like mama mbogas,” Ngaruiya said.

Ngaruiya said businesspeople need to start paying themselves by saving some cash for themselves.

He said: “Businesspeople pay a lot of people but they never pay themselves. How will they build their families if they don’t pay themselves?”

The government plans to start taking loans from insurance firms and Ngaruiya welcomed the idea saying they have been working with the government, which buys their insurance products for civil servants.

Ngaruiya also welcome the passing of the VASP Act, 2025 saying it expands the market for insurance firms, which have also gone digital.

“The same way people go online to buy goods is the same way the can also go online and buy insurance or save. At Madison Group, we have an investment firm, Madison Investment Managers, which can be bought online,” he said.

He said the reviewed Insurance Act will help in this because, he said, it will increase their ability to sell products faster and reach customers not currently reachable.

“The changes that we recommended have already been included in the new Insurance Act,” the MD said.

Madison Life Assurance national sales manager Joseph Gathogo said they have been at the Coast for a week also trying to get youth to get into the sales job.

“Unemployment is the biggest problem we have as a country. We want youth to sale insurance on commission,” Gathogo said.

He said they have focused more on employed people, forming about 85 per cent of their business, leaving behind the self-employed and small businesspeople.

However, because of the rise of SMEs, there is an opportunity to tap into the niche so as to increase the insurance penetration in the country.

Madison Life Assurance Coast regional sales manager manager Monicah Mitei said there are vacancies for sales people across all the five branches at the Coast.

We have general car insurance, health insurance, education insurance, investment policies and money market.

“Day by day, a small saving goes a long way,” Ngaruyia said.

INSTANT ANALYSIS:

As at 2005, the insurance penetration in Kenya stands at around 2.3 per cent, way below the global average of approximately 7.23 per cent. This is attributed to low disposable income, a poor saving culture, and a perception that insurance is a luxury rather than a necessity. However, despite the challenges, the market is undergoing transformation, with a rise in insurtech and new products aimed at increasing access, particularly through micro-insurance for lower-income groups.