Online funeral harambees dim insurance penetration
Commercial Banks and insurance companies are targeting high profile clients to boost funeral insurance premiums as poor Kenyans opt for funeral crowd-funding campaigns.
Premium revenues from funeral covers remained stubbornly low with research showing that only three per cent of Kenyans have last-expense insurance.
“It is very hard to convince someone to buy a funeral cover unless if they already have two other covers,” said assistant manager business intelligence at Minet Insurance Mwenda Kimathi.
Many insurance companies have launched funeral covers but their uptake has remained minimal due to generally low interest in insurance and because death is not something people want to think about.
Majority of Kenyans are turning to WhatsApp, Facebook and M-Changa to fund-raise as much as Sh1.5 million within a week for funerals.
“When all the money you get goes to basic needs, it is hard to think of insurance,” said Allan Kimani who raised Sh1.4 million on WhatsApp last month for his friend who died after a short illness.
M-Changa, a popular crowd-funding App, now has more than 500,000 users with more than 37,000 fundraisers who use the platform to mobilise hundreds of millions of shillings.
However, many are steering clear of fundraisers for fear of being conned.
Basic funeral insurance cost about Sh4,500 a year while a good one would cost you about Sh12,000 a year with a cover of up to Sh500,000.
Tapping into their banking and insurance customers, last week, Sanlam and Standard Chartered banks unveiled an App-based funeral cover which will see customers receive immediate cash payout within one working day upon submission of the claim.
“It was strategic in the sense that Stanchart has high profile clients with less risk and who are likely to understand the benefits of a funeral cover,” said Kimathi.
Available to a maximum of six people which include parents, parents-in-law, aunt, uncle, spouses and children, the product provides a range of convenient and attractive features including a Sh2 million higher sum assured value with a premium waiver benefit after the policy holder’s 65th birthday.
The package also comes with a family income benefit of up to a maximum of Sh55,000 for a period of 12 months, among other benefits.
“It is not in our culture to talk or plan for our death yet dealing with the loss of a loved one is the most difficult and expensive affair for the people we leave behind.
With the SC Mobile App Farewell Plan, you can now give your family the support and peace of mind they need when the time comes,” said Kariuki Ngari, Standard Chartered chief executive for Kenya and East Africa.
Other similar plans include Britam’s Fariji plan, Group last expense cover from Jubilee and many others.