Equity pilots insurance in DRC ahead of regional rollout
Wednesday July 03 2024
An Equity Bank branch in Nairobi, Kenya. File | Nation Media Group
Equity Group is piloting its insurance services in the Democratic Republic of Congo (DRC) ahead of a plan to roll out the business across its regional markets.
The lender has until now rolled out life insurance in the Kenyan market where it had over 11.5 million policies as at the end of May 2024.
The DRC pilot is expected to provide key lessons before the insurance services are launched in other subsidiaries, including Uganda, Tanzania, South Sudan and Rwanda.
“Through a local partnership in the DRC from March 2024, we have commenced doing some distribution for risk products. As we progress, you will perhaps see more from a footprint perspective of the insurance business in the other regional markets in 2025 and beyond,” Equity Life Assurance Managing Director and Principal Officer Angela Okinda told shareholders last week.
Equity Group’s first insurance subsidiary was operationalised in March 2022 to provide life products and hit two years of operations in March 2024.
The unit closed the quarter ended March with Ksh20.8 billion in total assets and with a pre-tax profit of Ksh321 million, a 106 percent growth from Ksh156 million in the same quarter last year.
Insurance service revenues for the unit were up by 40 percent to Ksh508 million from Ksh364 million in the same period last year.
Equity is seeking to leverage the fastest insurance growth segments including deposit administration and pensions, individual life assurance and group credit life.
The company is at the same time seeking to take advantage of low average insurance penetration rates in East Africa and the continent and the presence of just a few insurance companies in the market with limited success.
Last week, Equity Group shareholders approved the creation of a new health insurance subsidiary which will sit within Equity Group Insurance Holdings Limited which already oversees the group’s life and general businesses.
The lender is set to unveil new general insurance products in the second half of 2024 in Kenya.
Equity Group CEO James Mwangi says the insurance business has allowed the lender to diversify its product offering to customers, complementing actions to expand in the region.
“The insurance business is playing exactly where we had anticipated it. During these difficult times, we’ve realised that insurance is behaving very differently from banking. In our first nine months of operations, we got a return of 54 percent on equity at 68 percent in 12 months despite our balance sheet increasing fourfold. Insurance is not very sensitive to interest expenses and so its behaviour affirms our diversification in product offering,” he said.
Equity Group now has operations for units including banking, insurance and financial technology.