Saccos eye a slice of lucrative insurance market

By Our Reporter

Saccos are now scrambling into offering insurance cover for their members to earn commission as a key source of income to improve their much-needed balance sheet.  

While some societies have formed subsidiaries to execute the business, others have identified agencies to transact the business on their behalf.

Medical cover for members has emerged as a key area societies are training their eyes on with Saccos arguing that health of their members is critical in the survival of their business.

Biashara Sacco Board Chairman Joseph Njamuku said that offering medical cover to members will guarantee them a peace of mind to do business as they repay their loans.

“We want our members to be healthy and to avoid stress in case one falls sick, we offer the medical cover to intervene, if need arises,” he said.

Besides, he notes that offering the medical cover is a business opportunity which they would not let go.

Speaking exclusively to Sacco Review on phone, Njamuku stated that they will continue educating more members to buy the policy.

Trans National Time Sacco Board Chairman, Evans Sichangi Wanyonyi admitted that the medical cover is gaining traction within the Sacco sub sector hence the need to change strategy.

“We have thought about it and in the next three weeks, we are likely to settle on an agency to offer a medical cover for our members,” he said.

Wanyonyi stated that a medical cover for their members is an ideal one as it guarantees them a peace of mind in their places of work.

“Since teachers have a medical cover and we have opened the common bond to include the general public, a medical cover is ideal for the members from other organisations,” he stated.

Solution Sacco CEO, Daniel Marete said though they are not offering medical cover, they are exploring possibilities of offering one, through their brokerage firm. He said the society had registered Suluhisho Letu Insurance Agency to offer various forms of insurance policies and the separation will enable the Sacco to focus on its core business.

“We have been offering a lot of business to insurance agencies but we now feel it is time we plunge into the business directly to cut costs and the commissions earned will improve the society’s balance sheet,” said Marete.

The society has a medical cover for its staff and expressed confidence that once the one for members is launched, this would be a huge milestone for our customers and the society at large.

Unlike other insurance companies, Saccos have a presence even in the most interior parts of the country and will leverage on this to see more members have a medical cover.

“Our credibility, unlike other financial institutions, is very good and want to ride on this to ensure the insurance business succeeds,” he said.

Kenya Association of Front Office Banking Services, (KAFOSA) Chairman, Isedirous Agola however warned that venturing into insurance might dilute the focus of societies since their core business is mobilizing savings and extending affordable credit.

“So many people might fall sick and this might force societies to spend a tidy sum of finances and thus stepping away from their main focus,” he warned, adding that this is not going to help their focus and are instead going the wrong way.

However, he admits the numerous complaints of poor medical service for teachers might force a number of teacher-based societies to offer medical insurance to their members.

However, Marete said that opening of the brokerage firm to handle the insurance business will not interfere with its operations since this is a “different company with its own management.”

Gusii Mwalimu Sacco CEO Charles Omwansa did not rule out the possibility of launching a medical cover but if only members approve it.

“We will have to conduct wider consultations and education with members and this will include providing them with samples on the same,” he said.

Terming it a good idea, he added that people have different ideas on the same hence the need to have their thoughts on the same table before any action is taken.

Unison Sacco CEO, John Njogu however said they are not considering launching a medical cover since majority of their members have one through the TSC.

“Majority of our members are teachers who already have a medical cover and having one is not a priority,” he said.

Stima Sacco, through the MPAWA AFYA Health provides a comprehensive and affordable medical cover for individuals, families, businesses, groups, and institutions. During the launch of the cover, about four years ago, the society indicated that the millions they pay as commission to other third parties will instead enhance its balance sheet.

Imarisha Sacco offers a medical cover for their members through Pongea Medical Fund as well as Bingwa Sacco which offers individual and group medical schemes.

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