A new report has revealed critical insights into the insurance landscape for small and growing businesses (SGBs) in Nairobi, highlighting gaps in affordability, customization, and claims processes. The “Insurance Usage & Awareness Report 2024,” commissioned by WYLDE International in collaboration with AAR Insurance Kenya, underscores the pressing need for tailored insurance solutions to safeguard the operations of these businesses.
In a collaborative effort to empower small and growing businesses (SGBs) in Nairobi, WYLDE International and AAR Insurance Kenya have teamed up to conduct a comprehensive survey. WYLDE International, an acclaimed business consulting and entrepreneurship development organization, drives sustainable growth by bridging gaps in knowledge and access.
AAR Insurance Kenya, known for its innovative medical and general insurance solutions, aims to expand its market presence through digital advancements. The survey explores insurance coverage, attitudes, and interactions with providers among small and growing businesses, unveiling crucial insights into this underserved segment.
According to the report, “affordable insurance for small businesses” is a growing concern among entrepreneurs in Nairobi. Over 60% of respondents identified cost as the primary barrier to acquiring insurance coverage. This is compounded by challenges related to complex policy structures and a cumbersome claims process, with only 12% of claims being described as “somewhat smooth.”
Businesses have called for reforms, including simplified policies, better communication, and more transparency in claims handling. “There’s a clear demand for insurers to simplify the claims process and offer cost-effective solutions,” the report notes. These findings align with the fact that 74% of business owners see insurance as crucial, yet uptake remains low at 47%.
The survey, conducted in October 2024 with a sample of 180 business owners, revealed that property and motor insurance are the most popular choices among insured businesses. Despite this, the overall insurance adoption rate remains modest, with many businesses citing a mismatch between available products and their operational needs.
Among the key findings:
59% of businesses are not considering new Insurance Policies in the near future.
83% of insured businesses report positive experiences with insurers, though only 33% are “very satisfied.”
Risk management remains the top motivator for purchasing insurance, with 67% of respondents citing it as their primary reason.
The report also highlights a growing reliance on digital tools for managing insurance policies. Sixty-three percent of business owners now use online portals or client platforms, with 83% expressing satisfaction with these tools. Email remains the preferred communication channel for 70% of respondents, suggesting an opportunity for insurers to enhance digital engagement further.
Despite the challenges, the report identifies significant opportunities for insurers to expand their reach. Customized products tailored to the needs of small businesses, combined with improved service delivery through digital platforms, are seen as key areas for growth. Additionally, insurers are encouraged to adopt consultative approaches to better understand and address the specific risks faced by Nairobi’s small businesses.
Small and growing businesses (SGBs) in Nairobi are key contributors to Kenya’s economic development, driving innovation, job creation, and community growth. However, these businesses face a range of risks, from operational uncertainties to external challenges, underscoring the critical need for effective risk management.
Insurance serves as an essential safety net for SGBs, helping them protect their assets, employees, and operations against unforeseen events, ensuring their sustainability and resilience in a dynamic market.
The future outlook for the insurance sector among small and growing businesses in Nairobi is tied to addressing three critical areas:
Customization: Developing products aligned with the unique needs of small businesses.
Awareness: Increasing education about available insurance options and their benefits.
Affordability: Creating cost-effective policies to attract a broader customer base.
Based on the findings of the joint survey by WYLDE International and AAR Insurance Kenya, several key recommendations have been put forth to better cater to the needs of small and growing businesses (SGBs) in Nairobi. These include the development of affordable, customized insurance products tailored specifically for SGBs and the enhancement of transparency and efficiency in the claims process.
Additionally, increasing awareness and engagement through consultative and collaborative approaches, as well as leveraging digital platforms for improved communication and service delivery, are crucial steps towards fostering a more supportive insurance environment for SGBs.
The “Insurance Usage & Awareness Report 2024” offers a roadmap for insurers to bridge the gap between product offerings and the needs of Nairobi’s dynamic small business community. By prioritizing affordability and simplifying customer experience, insurers can not only boost coverage rates but also foster trust and satisfaction among entrepreneurs.
As Nairobi continues to establish itself as a hub for innovation and business growth, addressing these insurance challenges will be vital to ensuring the long-term sustainability of its small business ecosystem.
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