Underwriter leverages on technology to offer an innovative solution to members of Small Christian Communities
By George Gichuki
We live in a world that is prone to risks and uncertainties. Natural disasters like earthquakes occur unexpectedly, we fall sick or are involved in accidents which necessitate hospitalization and other related expenses, our properties get destroyed by fire and other calamities and in the worst case scenario, we lose dear members of our families and friends. Needless to say, that loss causes a lot of anguish and sorrow in our lives. Restoring peace after such agonizing experiences is not a walk in the park. Against that background, having an insurance cover comes in handy. Insurance is based on many principles; key among them being the principle of indemnity. The insured party is compensated in the event of a damage or loss as per the contractual agreement with the underwriter. It is therefore very appropriate that when the Catholic Church established an insurance company in 2005, it was named Pacis – a Latin word which means of peace.
Pacis is wholly owned by the Catholic Church through its dioceses, congregations and institutions in the country – each one of them has a share in the company. In addition, the Kenya Conference of Catholic Bishops also owns a share of Pacis which is currently offering general insurance. “We focus on short term or general insurance – property, liabilities and health (inpatient and outpatient),” says Mr. James Ngunjiri, the Managing Director of Pacis. The products offered by Pacis include : motor ( private and commercial ), fire and burglary, political and terrorism , workmen compensation as well as medical ( inpatient , outpatient and last expense) . The company also offers marine insurance and a professional indemnity cover for professionals such as lawyers, doctors and engineers. “By offering innovative products, we have been profitable in the last ten years that we have been in business,” Mr. Ngunjiri notes.
The underwriter’s goal is to perfect its art in offering short term insurance, before spreading its wings to long term ( life) insurance and asset management.
The local insurance industry is characterized by cut throat competition. It is nearly impossible to achieve significant product differentiation and the number of industry players is large for the size of market that Kenya is currently enjoying.
This has led to serious price wars among the players as they strive to get a share of the cake in the market. By and large, the prices of premiums have been declining in the recent past, even as the rate of inflation continues to rise.
“We are focusing on the uninsured market especially in our niche segment and this has worked well for us since we have been able to make profits from our core business (underwriting) as opposed to relying only on investment income,” says Mr. Ngunjiri. Insurance companies invest in real estate and other financial markets and the trend in Kenya has shown that most of them are being sustained by other investments rather than their core business.
Currently, the company is being guided by a five year (2017-2021) strategic plan.
“We have made a conscious decision to focus mainly on serving all religious communities in Kenya during this period as we were formed by the church ,”Mr. Ngunjiri emphasizes. In that regard, Pacis Insurance has embarked on a drive to cover churches (irrespective of the denomination) and all the institutions under their management like schools, dispensaries, hospitals, universities and shopping malls. The first task to that end has been undertaking a risk survey and an insurance valuation of the said properties as well as the churches – especially the old iconic churches which were put up by the missionaries – before insuring them.
The Canon Law currently governing the Catholic Church globally was promulgated in 1983. “Can 1284 §2 10 requires the church stewards where necessary to insure the properties under their stewardship and we are therefore assisting in abiding by its provision while undertaking the said business,” observes Mr. Ngunjiri.
“I belong to the school of thought which holds the view that if animals can understand the fundamentals of insurance, then it should be far much easier for human beings to do so,” quips Mr. Ngunjiri. For instance, when attacked by a lion and one of them is captured, buffaloes bring a bigger herd in order to save one of their own from the eminent death,” he adds to illustrate his point. In essence according to him, insurance entails misfortunes of a few being compensated from the fortunes of many.
It is in that spirit that welfare groups (known as chamas in Kiswahili) have become popular in the country as vehicles of raising funds for their members during weddings and funerals among other occasions. With the advancement in technology, a trend has emerged whereby such members are forming groups via WhatsApp – a free cross platform messenger and Voice over Internet Protocol (VoIP) application. WhatsApp groups have gained prominence in mobilizing funds among members in times of need.
Churches by the same token are modeled in a way that enables them to reach worshippers living in the same neighbourhood. “In the Catholic Church, neighbours fellowship together through the small Christian communities – the equivalent of bible study groups or cell churches among the non- Catholics – and these forums also provide a platform for catering for their social needs,” says Mr. Ngunjiri. Consequently, Pacis has developed an innovative product to meet the last expenses among members of the small Christian communities. “The product has been digitalized from end to end with premiums and claims being paid conveniently using the mobile phone,” points outs Mr. Ngunjiri, adding that the underwriter is initially targeting the over sixteen million members of the Catholic church in Kenya. So far, the product has been successfully piloted among members of the Catholic Women Association in the Archdiocese of Nairobi and the diocese of Murang’a.
“Chamas in my view offer the stiffest competition to the insurance retail market because once mobilized, funds are disbursed to members without undue delay,” observes Mr. Ngunjiri. “By paying claims on a real time basis once we authenticate them, the new product will fill a critical gap in the market,” he adds.
According to Mr. Ngunjiri, people do not get insured because of the ease of buying the product or service but because of the benefits they derive from the process. “In my view, a lot of growth shall be experienced in the industry once underwriters are able to deliver the benefits digitally to the customer without necessarily having a physical engagement,” he observes. Currently, the insurance process is largely manual but with the advancement in technology as well as the internet of things, it is gradually getting digitalized.