Insurance industry to cut more jobs in 2020 as digitization continues to bite – reportMarch 5, 2020
NAIROBI, Kenya, Mar 5 – The headcount in Kenyan insurance companies will continue to fall in 2020, thanks to automation and digitization, a new report has revealed.
KPMG’s Insurance Trends 2019 report reveals that 71 percent of insurance CEOs prefer investing in technology instead of employees.
KPMG Audit Partner Alex Mbai said industry players have upscaled their use of technology and are no longer putting effort towards building their workforce.
“The changes we have seen are likely to continue because CEOs have realized that growth of their companies is no longer dependent on their workforce but is about the quality of technology they invest in,” Mbai said.
Insurance brokerage businesses will also not be spared by digitization. According to the report, potential policyholders are more likely to look up information on the internet, instead of employing the services of a broker.
The report comes barely six months after a section of local insurers started sending their workers home.
In September 2019, Sanlam Kenya announced it was laying off tens of its staff as part of a cost-cutting measure aimed at reducing its costs by more than Sh200 million.
In January, Jubilee Insurance announced it was laying off 52 full-time workers to reduce redundancy and meet its operational needs.
The insurance is not the only sector in the economy to be impacted by automation; banking, media, and telecommunications have also had to reduce its workforce owing to the adoption of technology.
The Insurance Trends report comes at a time when insurance companies in the country are digitizing their services to encourage deeper penetration of insurance.
Just recently, the Association of Kenyan Insurers (AKI) introduced a virtual motor insurance certificate to curb insurance-related fraud in the industry.
AKI said it hoped digitization of the insurance certificates would break an elaborate motor vehicle fraud scheme that has been robbing the industry millions of shillings through fake multiple claims.
Kenya’s insurance penetration stands at 2.8 percent, with a lack of trust in the industry, limited knowledge of products and limited reach to the informal sectors among the leading reasons to blame.