The Co-operative Insurance Company of Kenya Limited
The cooperative insurance company of Kenya has an acronym as CIC. It was established in nineteen seventy eight. Formerly this company was known as cooperative insurance services (CIS). The company is most preferred in the cooperative e movement as the core founders of the insurance industry, Rösner, Hans J (2012 pp. 71) It has recorded an average growth rate of thirty seven percent in the year two thousand and five. Its premiums have also grown from 180million to 1.7billion in a life span of eight years. Its general growth has been attested globally as a well known company with an annual income of 1.7billion.
In Kenya CIC insurance company has 3878 shareholders and it remains the greatest strategic shareholder with 74.3 percent stakeholders and individual investors contribute 25.7%. In the Nairobi stock exchange, CIC is a leader in providing insurance services in the cooperative movement and the middle low income markets of Kenya
The number of outlets of CIC insurance
In Kenya CIC insurance has quite number of branches. Just to name a few we have; CIC insurance group ltd- upper hill branch, CIC plaza Mara road off upper hill road, reinsurance plaza, mess Flr,aga khan walk Nairobi. In the world there are many branches situated in different countries such as in southern Sudan, Rwanda and Tanzania among other areas. It works on the principle of integrity, productivity, team work, fairness and dynamism. The customer value propositions include fastest in service delivery, fairest price makers, offering friendly relationships not forgetting quality customer service.
In the year 2008, CIC launched a micro finance package of vending I Kenya. It aim is targeting a market of 5m people. Its key components of the package are to offer ksh100, 000 to people in case of death, 300000 ksh for funeral expenses and also weekly income for a period of two years when a person is in total disability. The other component is the medical scheme benefit called the national hospital insurance fund. This is supposed to provide customers with a package of impatient services both I private, government and in mission hospitals.
According to Margaret E. Lynch (1976 pp. 465), CIC insurance operates on many principles which include,
Principle of insurability
for an individual to be insured against any risk, he or she must meet the following conditions; the risk should have definite time of occurrence, it should have large number of similar risks, define the loss clearly, the risk should be fortuitous in regard to the beneficially of the insurance, have or specify available premiums in which the insured is able to pay, and the risk should be catastrophic meaning that it should not be the one which occurs all the time
Principle of legality
CIC works on this principle of legality by considering the following requirements which include: indemnity, in which the CIC insurance company ensures that the insured is taken back to his original financial position he or she enjoyed before the risk occurred. Insurable interest, it requires that the insured to directly suffer from a loss for compensation to take place. Utmost good faith requires that material things should be displaced at the time of taking an insurance cover. Customers should give the right information concerning their property in good faith. Contribution, it defines a method in which the insured contributes towards indemnification. Subrogation, here the insured surrenders all the legal rights to the insurance company so as to persue recoveries at the time of loss. Proximate cause, in this case the cause of the risk and the one in which the insured had insured against should be related, for compensation to take place. And finally mitigation, it requires the owner to keep the loss suffered to the minimum in case of any loss if the asset was not insured.
Insurance companies operates on the principle of protecting the financial well being of its customers, company or the property in case of any unexpected loss,Gollier C. (2003)
Mode of operation of CIC insurance company in Kenya
The CIC insurance group comprises CIC insurance and CIC asset management ltd. It is a leader of the micro finances other financial markets in Kenya. It has been in operation for the last 33 years providing insurance services to cooperatives and low income earners in various market segments. It offers services like general insurance, life insurance, pension, medical and asset management. According to the Mr. Karanja, a technical Engineer, CIC faces the following connectivity challenges:
Business continuity concerns
CIC uses 2ISP links to the Internet. At any given point, only one of them is being used up while the other one is left idle. In case of failure, the operation has to be performed manually thus causing delay
Deluge of Spam
Here we have a maximum number of inbox mails which are received per Spam; they are normally 10-20 spams each day.
The purchase of cyber am solution, came about after looking at a number of Internet security solutions as Karanja puts it. They had to deploy the use of two(2)CR 300i so as to purchase the cyber am from Ace Micro Services,Venzin Markus (2002 PP. 348).
Economic importance of CIC insurance in Kenya
In the past 2 years, you CIC insurance in Kenya have received seven awards which include the annual think business insurance award in 2011. These awards were audited by business advisors, accountants and the pkfn east Africa. This has motivated the company to resolving into empowering its employees and thereby uptake its products and advancing in terms of technology, Barrett, Christopher B (2007 PP. 675). It has come up with internal training program to enable employees and other outsiders to develop and foster their capabilities and thus creating employment importunity in the country. The awards promoted the general standard sod the industry and its performance in life insurance, general insurance, composite underwriter of the year, and the ICT award among other areas of specialization.
The main competitors of the organization
Life in Kenya today has become insurance oriented. People are insuring their goods and property to reduce the risk of being grossly affected by various calamities. In this regard, there has been a major increase in insurance companies so as to accommodate the rising number of customers demanding the service. Te main competitors of the CIC insurance are discussed below.
Madison Insurance Company
This is one of the leading companies that offer insurance services in Kenya. It has a total of fourteen branches all over the country; western region, Nairobi region, coast and central regions. Blue Shield Insurance Company
This company is among the top insurance companies in Kenya. Some of the products it offers are; insurance on agricultural products, general insurance and life insurance.
Jubilee Insurance Company
It is widely spread since it is found in the entire east African region. It has a very strong financial background since it has been in the market for over 70 years. Jubilee insurance company is an amalgamated insurer, for example Kenya leads in offering medical insurance services.
British American Insurance Company
This company was established in the year 1965 in Kenya. It provides a number of services among them; group life, individual life, pension schemes and even health care insurance services.
Kenindia Assurance company
The company was established in the year 1978. It was formed the same time when four Indian insurance companies came up and it mostly deals with non-life issues.
Heritage Insurance Company
This company provides insurance services only for short term basis. It mainly deals with payment claims. It was recently named as one of the most outstanding insurance companies that offer claim payment services in Kenya. The reward came from the association of Kenya insurance brokers.
Insurance Company of East Africa (ICEA)
The company is an associate of the first chartered security agencies in Kenya. It mostly deals with product of business corporations.
APA Insurance Services
This is the American photographic artist insurance company that issues photographic products to professional photographers. It also compensates workers and provides employment liability services
Pan Africa Insurance Holdings
It was established in Mombasa in the year 1947. It started using the name Pan Africa Insurance limited in 1963 and was then recorded on the Nairobi stock exchange.
UAP Provincial Insurance Company
It deals with life insurance, commercial insurance and also personal insurance.
The marketing strategies of the CIC
Consumer needs change each and every time, for this reason insurance companies have developed various marketing strategies to manage the quality of service delivery among customers. CIC as a company has developed various strategic techniques to accommodate the competitive economic environment. Some of the strategies it uses are:
Pricing Strategies
The choice of the price you settle no has consequences to not only you but also your competitors. In the case your price is higher than that of the competitors, and then there is a higher possibility of your competitors experiencing an increase in profit due to the increase in the number of customers. CIC has most of its services subsidized to match with the consumer demands of the Kenyan economy.
Distribution strategy
This strategy deals with the place you sell your products. It is very critical because it’s a key component towards increasing sells. The company has offices all over the country hence there is even distribution of services to the clients.
Branding Strategies
CIC uses specific demographics so as to be uniquely identified. This aspect makes it enjoy monopoly since it has a distinct cording of its goods and services. The company also enhances this strategy by using layouts of modules.
Test marketing strategy
Testing a new strategy helps in evaluating whether the new method is viable and economical. It is therefore necessary to always conduct a test hypothesis before implementing the market strategy. CIC embraces this strategy by ensuring that all the new business projects are evaluated before being implemented
Communication creation
The company exercises this market strategy by ensuring that there is an integrated channel of communication through each and every subsystem of the entire organization. Meetings are always held in case of any information that needs to be channeled through. Communication is indeed a perfect tool towards attaining economic stability.
Strengths and challenges of the organization
The CIC has a number of strengths namely;
It is widely spread all over the country with over 20,00000 million clients
It experiences maximized profit due to the higher number of customers
It is recognized by the association of Kenyan insurance brokers as a top insurance agency in Kenya.
The company also has a number of challenges namely;
It faces a great challenge from the high emergence of insurance firms which leads to a high competition rate on the stoke market. The high competition eventually leads to a decrease in profits in the long run.
Kenya is a developing country facing economic challenges due to constant weakening of the Kenyan shilling. This in the long run leads to banks developing higher interest rates thereby grossly affecting the insurance company.
In the year 2007, Kenya experienced the worst post election violence. This lead to emergence of internally displaced people thus stabilizing the Kenyan economy thereby grossly affecting the insurance policies in Kenya since new legal policies had to be generated to accommodate the changing economy.
External investors pose a major challenge to the organization though they also improve the company to some extent. These investors invest in the country but take with them higher interest rate which at the end affects the company financially.
The management of the organization
The corporate insurance company is a private organization managed by a board of directors. The board of directors participates in the management of the organization and they are decision makers of the entire agency. This board of directors works hand in hand with the chief executive officer of the company.
Opportunities for future growth
The company has various opportunities for future growth among them;
An increase in man power developed by the rising number of students taking actuarial science in colleges and university. As most students are taking mathematics and business oriented courses it leads to increase in professionals in the field thus an opportunity for future growth.
Kenya is a country with a rising economy. This has a positive impact because it gives rise for growth among companies one of them being the CIC.
The large number of external investors gives room for new growth and development of the entire company.
CONCLUSION
CIC has contributed economically through the development of M-Bima policy to enable money transfer. Being one of the leading micro finance company in Kenya, it is capitalizing on banks, Saccos and monetary institutions so as to promote micro insurance in Kenya. Financially, the company’s investment grew by about 169 percent as a result of high interest rates invested in the market property, Jarvis, Christopher R (2002 pp. 338). The factors that have enabled CIC Insurance group to succeed include; proper planning, clear communication within the company, implementation of open door policy, staff empowerment, partnership within cooperatives sector, good and visionary leadership, updated lCT systems.
References
Ouma, Sylvester J. Development in Kenya Through Co-Operatives. Nairobi, Kenya: KNFC Printing Press, 1989. Print.
Jarvis, Christopher R. Wealth Protection: Build and Preserve Your Financial Fortress. New York: John Wiley & Sons, 2002. Internet resource.
Rösner, Hans J, Gerald Leppert, Philipp Degens, and Lisa-Marie Ouedraogo. Handbook of Micro Health Insurance in Africa. Wien: Lit, 2012. Print.
Margaret E. Lynch, Editor, “Health Insurance Terminology,” Health Insurance
venzin Markus (2002 PP. 348). Building an International Financial Services Firm: How to Design and Execute Cross-Border Strategies. Oxford: Oxford University Press, 2009. Print.
Barrett, Christopher B, Andrew G. Mude, and John Omiti. Decentralization and the Social Economics of Development: Lessons from Kenya. Wallingford: CABI, 2007. Print
