Absa life assurance bets big on innovation to boost profitability
With a low insurance penetration in East Africa, listed lender Absa Group through its subsidiary Absa Assurance is setting its sights on expanding its foothold in the life insurance business through innovation and new distribution channels. CNBC Africa’s Aby Agina spoke to Githanji Waiguru for more.
Wed, 17 May 2023 10:54:01 GMT
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AI Generated Summary
- Absa Assurance adapting to recent changes in the finance bill to address challenges in disposable income and consumer spending
- Enhanced consumer awareness post-pandemic driving demand for insurance covers, particularly in the life insurance sector
- Focus on affordability and flexibility through revised pricing strategies and digital distribution models to broaden market reach and drive growth
Absa Group, a listed lender in East Africa, is making strategic moves to expand its foothold in the life insurance business through innovation and new distribution channels, aiming to boost profitability amidst economic pressures in the region. Speaking to CNBC Africa, Githanji Waiguru, CEO of Absa Assurance, shed light on the impact of recent changes in the finance bill, particularly the increase in VAT and income tax for high earners, on the disposable income of individuals. Waiguru highlighted the potential implications of these changes on consumer spending, emphasizing the potential shift in priorities that may lead to a decrease in life insurance uptake. However, he also expressed hope that government support for accessible insurance products could mitigate the impact on the economy. Understanding the evolving consumer landscape post-pandemic, Waiguru noted a heightened awareness of the importance of insurance covers, particularly in the life insurance sector. He pointed out a growing trend towards investment in insurance products, such as endowment plans, as a means of financial security amidst uncertainties. To address affordability concerns, Absa Assurance has reevaluated pricing strategies, focusing on simplifying products and tailoring them to meet individual financial needs. By enhancing affordability and flexibility, the company aims to cater to a broader market segment and drive growth. In response to emerging market trends and the entry of new players into the insurance sector, Absa Assurance is prioritizing innovation and market responsiveness. Waiguru outlined strategic steps, including the expansion of distribution models through digital platforms and data analytics, to enhance market reach and accessibility. By leveraging digital tools and partnerships with financial service providers, Absa Assurance seeks to enhance its competitive edge and capitalize on the growing demand for insurance solutions. Recognizing the significance of climate risk insurance in the current landscape, Absa Assurance is actively exploring opportunities in environmental, social, and governance (ESG) initiatives. By collaborating with partners and supporting community-driven sustainability efforts, the company aims to address evolving consumer preferences and demonstrate its commitment to environmental and social welfare. As Absa Assurance navigates the dynamic insurance landscape in East Africa, its focus on innovation, affordability, and sustainability underscores its vision to drive insurance penetration and bolster long-term profitability in the region.