Faulu Microfinance Bank recorded significant growth in its bancassurance business following successful automation of its insurance sales last year. Overall sales have hit Ksh. 327 million this year, a 31% growth compared to a similar period last year.
The growth has been attributed to increased demand across the general and life insurance segments and automation of services to boost efficiency.
The bank survived a tough economic period magnified by the COVID-19 pandemic to record increased uptake of insurance products through its bancassurance unit.
Last year, Faulu completed automation of its bancassurance operations at its more than 60 branches countrywide. The Rensoft system facilitates quick quotations and faster processing of insurance covers and products underwritten by UAP Old Mutual Group and other licensed insurance companies in Kenya.
In addition to life assurance, Faulu’s bancassurance services also include medical, agriculture, motor, business/SME and other general insurance products. Sales of general insurance this year have reached Ksh. 212 million compared to Ksh. 145 million in the same period last year highlighting the impact of digitization of processes on the bottom line.
“The positive results from our bancassurance operations underline the pent up need for insurance products in the market we serve. Our decision to automate our bancassurance operation is finally paying off. Our customers can access a wide range of insurance products through a simple but efficient process,” said Apollo Njoroge, CEO Faulu Bank.
Adoption of bancassurance by banks and microfinance institutions, coupled with innovative distribution systems, is seen as a way of deepening insurance coverage.
“There is ample headroom to sell insurance products to our expanding SME clientele with products covering construction, fire, burglary, machinery, goods-in-transit, public liability and personal accident.” We are also soon launching insurance Bid, Performance and Advance payment guarantees with select insurers. These solutions are targeted at supporting our trade finance ambition giving our clients options in structuring their facilities,” concluded Mr. Njoroge.