Jubilee Insurance has been named the most attractive insurance company from both a potential return and financial health perspective according to Cytonn Investments Management Limited has released the H1’2019 Insurance Report.
The report is themed “Regulation and Consolidation to Drive Attractiveness”, analyzed the H1’2019 results of the listed insurers in the country.
“The analysis is brought about by a need to make actionable recommendations to our investors, by considering which listed insurance companies are the most stable and also those which have the best franchise value and future growth potential,” said Shiv Arora, Cytonn’s Head of Private Equity.
“While the sector remains attractive with vast potential, we have witnessed the insurance sector grappling with low penetration, increased cases of fraudulent claims and the required increase in capital following adoption of a risk-based capital adequacy framework.”
David Ngugi, Investment Analyst at Cytonn Investments notes that In recent times, the insurance sector has benefited from convenience and efficiency through adoption of alternative channels for both distribution and premium collection such as Bancassurance and improved agency networks.
Ngugi also adds that advancement in technology and innovation making it possible to make premium payments through mobile phones, and a growing middle class, which has led to increased disposable income, thereby increasing demand for insurance products and services.
” These factors have been key in driving growth of the sector. We also expect more mergers within the industry as smaller companies struggle to meet the minimum capital adequacy ratios. We also expect insurance companies to adopt prudential practices in managing risk and reduction of premium undercutting in the industry as insurers will now have to price risk appropriately,” added David
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