INSURANCE Regulatory Authority of Kenya (IRA) is holding consultations with stakeholders with a view to coming up with a law that will allow the sale of low insurance products.
If enacted the law would give a go-ahead to insurance companies and other investors to start selling low-cost insurance products as the country seeks to increase the number of its nationals covered by insurance policies.
IRA said on Tuesday that it is holding consultations with all the stakeholders following successful development of the proposed law to guide the establishment of low-cost insurance companies known as microinsurance.
"The laws that we have proposed are based on the best global practices on microinsurance," said Godfrey Kiptum, the Chief Executive Officer of the IRA during consultations with the industry at Kenya's College of Insurance in Nairobi.
Kiptum called on the industry to prepare to offer Kenyans affordable insurance products that meet their most relevant needs.
He said insurance companies must change their perception to accommodate the needs of low-income earners who are expected to be the main buyers of low-priced insurance products.
"The insurance industry in Kenya is still very traditional and rigid in its practice. We need a paradigm shift," he said.
Statistics by IRA show that insurance industry in Kenya contributes 3 percent to the national economy every year.
Although this is the highest contribution in East Africa, with the rest of economies gaining less than one percent from the industry, it is still seen as low as in markets like South Africa, insurance contributes 14 percent to the economy.
He said companies venturing into micro insurance must get out of conventional thinking and invest in the high level of innovation to create the best understanding of the new market.
The proposed law comes just days after President Uhuru Kenyatta committed to registering about 26 million Kenyans to the National Hospital Insurance Fund (NHIF) from the current seven million Kenyans, as part of his legacy of providing universal health insurance.
The insurance regulator in Kenya has also proposed regulations to guide banks that sell insurance products under what is known as bancassurance.