Hailstorms are especially devastating in areas such as Kenya because most Kenyans work in farming, creating significant growth potential for
climate risk and agricultural coverage. After the 2013 hailstorm, for instance, tea farmers (which are part of a multi-billion-dollar industry in Kenya) lost over
12,890 kilograms of tea in a single day. Kenyan farmers would be wise to seek insurance coverage and protect themselves from histories repeated.
Second to South Africa, Kenya is the best-regulated insurance market in the region, accounting for
seventy-percent of the East African insurance industry. Kenya is also one of the
most developed African countries and maintains steady economic growth. According to the World Economic Forum,
higher income directly correlates with a competitive insurance market. As of 2016, Kenya has
forty-nine insurers and five re-insurers. However, the African insurance market could face bouts of disarray over the next few years stemming from the 2016
regulatory amendments to Insurance Act No. 487 of 1984. Essentially, the new regulations almost double companies’ capital investment requirements, and many underwriting companies (majority of which are family-owned) may be
unable to meet them.
Despite these regulatory changes, Kenya’s insurance market has potential for growth. This is likely due in part to the fact that Kenyan farmers continue to excel as prominent exporters of goods (such as tea), and in turn, the need for property and/or agricultural insurance grows as well. As of 2015, the population size of Kenya was 44.9 million. However, according to recent statistics, property and/or casualty insurance only comprises less than thirty-percent of the non-life insurance market. While the imminent legislative changes may bring temporary chaos, the Kenyan insurance market is ripe for growth.