DOSSIER INSURANCE | ITW: Julius Kipng’etich, CEO, Jubilee Holdings
Julius Kipng’etich sits in his office on the eighth floor of a skyscraper in downtown Nairobi. He is only a few weeks into his new job as the regional chief executive officer (CEO) of Jubilee Holdings – which is East Africa’s largest insurer by customer base and which collected KSh13.8bn ($135.9m) in premiums in 2016 – but he has no shortage of ideas for the insurer’s regional expansion. Jubilee has subsidiaries in Burundi, Kenya, Mauritius, Uganda and Tanzania. “We are looking at using our presence in Burundi to move into Rwanda and the Democratic Republic of Congo,” he tells The Africa Report.
Rolling out new customer-friendly technology is another part of Kipng’etich’s strategy. In his short time in office since December 2017, Jubilee has already launched an automated messaging service and three mobile apps. “What the insurance sector needs is a proper disruption because we are too comfortable with where we are now,” Kipng’etich says.
Kenya’s insurance sector must innovate if it is to meet a target of doubling insurance penetration in the next few years, he argues. Currently, insurance penetration stands at 2.75% and has in fact fallen from a high of 2.9% in 2014, according to Insurance Regulatory Authority figures. Kenyan insurers have set themselves a target of 6% penetration by 2020.
“It’s possible for us to [meet this target], but we need to get moving,” Kipng’etich says. His short-term plans include integrating artificial intelligence, cloud computing, mobile products and blockchain technology into Jubilee’s insurance products. His goal is to drive mass customisation and individual assessment of risk.
“Banks have moved to credit scores [using technology], and we insurers need to go the same way,” Kipng’etich says. “By measuring behaviour electronically and building sufficient data sets, we can customise insurance products.”
Changing to a demand-driven model, although difficult, seems to be the future of the sector. This could help attract new customers in East Africa, where people hardly ever seek insurance outside of the legally mandated products like motor vehicle insurance. Kipng’etich says the biggest hurdles to growth prospects in the sector are an outdated business model and a general lack of trust in insurance companies.
But if insurers can offer cheaper policies with shorter commitments, more people might get on board. “There are many ways of mitigating risk in our social fabric, and insurance needs to understand these and evolve,” Kipng’etich adds. Across the region, people tend to turn to churches and friends and family, rather than insurance companies, to protect against risks.
Kipng’etich has had a storied career as a turnaround manager in the public and private sectors. As the former CEO of troubled retail chain Uchumi, he helped to stave off bankruptcy for years but the company risked collapse in late 2017. He has also worked as the head of Kenya’s Wildlife Service and as the CEO of Equity Bank. “I have a 360-degree view of the economy because of these experiences,” he says.
At home, Kipng’etich is troubled by Kenya’s macroeconomic performance. The government’s interest rate cap on loans has reduced the allocation of capital, especially to small and medium-sized enterprises, he says. But he is optimistic that the economy has turned the corner from last year’s fraught election period and re-run. “This [election] was unique because it was prolonged,” he says, “but we are already bouncing back.”
From the March 2018 print edition