CENTRAL BANK OF KENYA
30TH INSURANCE INSTITUTE OF KENYA (IIK) ANNUAL CONFERENCE 2015
Intercontinental Hotel, Nairobi
Opening Remarks by Dr. Patrick Njoroge
Governor of the Central Bank of Kenya
October 23, 2015
As Prepared for Delivery
Good morning! I am very pleased to join you at this auspicious occasion, the 30th
Annual Conference of the Insurance Institute of Kenya (IIK). I am particularly
grateful to the IIK for inviting me, and I would like to commend the IIK’s
Executive Council for organizing the conference. This is a useful forum to discuss
pertinent issues relevant to the insurance industry, as well as the broader financial
sector and the economy at large.
The theme for this year’s conference “Enhancing Stakeholders’ Value for
Sustainable Business” is very timely, as it resonates with the evolving global
dynamics. At the outset, the subject of sustainability has increasingly gained
importance in modern-day business the world over—businesses can no longer
consider themselves successful if they do not take into account the environmental
and social impact of their activities. It is also clear that businesses prosper as the
society and the environment they operate in also prosper.
More recently, the importance of another aspect of sustainability was captured in
Goal 8 of the United Nations Sustainable Development Goals (SDGs) that were
launched last September, which is “to promote sustained, inclusive and
sustainable economic growth, full and productive employment and decent work for
all.”

Of particular relevance is the critical issue of achieving sustainable financing, as
countries strive to attain and sustain positive economic outcomes. To this end, one
of the targets for Goal 8 of the SDGs is to strengthen the capacity of domestic
financial institutions to foster greater access to banking, insurance and financial
services. For Kenya, these policies are elaborated in Vision 2030, our development
blueprint, with the aspiration of a vibrant and globally competitive financial sector
that promotes high level of savings to finance Kenya’s investment needs, which is
in turn informed by the objectives of enhancing financial stability, efficiency and
accessibility to all Kenyans.
Ladies and Gentlemen, we are all aware of the transformative change that has
been witnessed in Kenya’s financial and economic landscape, with increased
financial inclusion driven by the mobile-banking revolution. Access to financial
services had increased from 27.4 percent in 2006 to 66.7 percent in 2013. This
increase is testimony to the success of the reforms and initiatives implemented by
the players in the financial sector. The Central Bank of Kenya too, in partnership
with financial sector players, has facilitated these reforms and initiatives to
enhance financial stability, efficiency, and access. But much more remains to be
done.
A natural question at this forum is whether a similar transformative change can
take place in Kenya’s insurance sector. What constrains such a change? For
instance, can ways be found to expand access to affordable insurance services, or
provide more innovative contracts that are more suitable for different segments of
the population? Or for different types of risks? How can we shorten the time it
takes to make payments to claimants? Ladies and Gentlemen, I want to challenge
you to a greater vision, to innovations in the insurance sector that will be truly
transformative.
It is encouraging to note that Kenya’s insurance sector has experienced rapid
growth over the past decade, which is likely to continue over the medium term.
However, there has continued to be low penetration rates and low uptake of
insurance products over the years. The FinAccess Survey for 2013 showed that
only about 7 percent of adults in Kenya access insurance products, even as the
World Bank trumpets the insurance sector in Kenya as one of the more developed

in Sub-Saharan Africa. One factor that has contributed to this low access is poor
perceptions and lack of awareness of the existence and importance of insurance
products. The lack of suitable, affordable and accessible insurance products is seen
as another constraint. The insurance industry also faces a particularly acute
challenge of reaching the lower-income groups.
For the balanced development of the financial sector, financial literacy and
consumer protection are also essential. Consequently players in the insurance
industry have a responsibility to educate consumers on the importance of
insurance services and the alternative products. Although consumer education does
not translate immediately to the bottom line, it is critical for the sustainable growth
of businesses and the industry.
Finally, I must emphasize that the resilience of our financial sector is attributable
largely to the invaluable collaboration between the private and public sector over
the years. These collaborative efforts have been critical in facilitating key reforms
in the pensions sector, insurance industry, the capital markets, SACCOs, and the
banking sector. The Central Bank of Kenya and the other financial sector
regulators, will continue working with the private sector to ensure that the sector
remains stable, efficient, and accessible.
The growth potential and opportunities for the insurance industry are vast. We can
also embrace a greater vision that supports innovations in the insurance sector that
can be truly transformative.
With these remarks, Ladies and Gentlemen, I declare the 30th Annual Conference
of the Insurance Institute of Kenya officially opened. I wish you all fruitful
deliberations.
Thank you.