Jubilee Holdings chairman Nizar Juma during the interview. PHOTO | SALATON NJAU | NMG East Africa’s largest insurer Jubilee Holdings recently struck a Sh10.8 billion deal with Allianz SE, the largest general insurer in the world.Jubilee chairman Nizar Juma spoke to the Business Daily about the state of business now given the Covid-19 disruption and what the deal with the German insurance firm means.
The Covid-19 health crisis has quickly morphed into a financial crisis, triggering massive job losses. What is the likely impact on credit life covers?
Covid-19 has increased retrenchments and definitely the payouts will rise. But at the moment, we have not adjusted the pricing of credit life covers.More banks are now asking for credit life covers that take care of retrenchment. Traditionally, they have been more concerned about death and disability.Retrenchments look set to go up in case the infections spike rapidly so probably in the long run, the premiums for credit life covers will be adjusted upwards.
Are withdraws and surrenders a big concern for insurers like Jubilee right now?
Yes, they are. It is happening with our life policies and pension plans. Either people are stopping contributing or they want part of their funds back to survive the economic difficulties.We are trying hard to persuade people who can’t keep contributing to keep their accounts dormant. Even if they are not paying we are not cancelling the policies.The cancellation of life policies started by going up by between 20 and 30 percent but has reduced. Some are just scared that insurance firms may go burst.Our team is making between 15,000 and 20,000 calls per month to our policy holders asking them not to cancel the covers.The figure of loans on life policies has also gone up in the last three months and I think this is expected as a way of making ends meet.
How do you manage business in such a situation where there is less business coming in and existing customers are talking about surrenders and withdrawals?
We are in a fortunate situation because nearly half of our business is non-insurance. This is where diversification of revenue streams counts a lot.When things go bad in insurance, we can always make up elsewhere. We have maintained a strong balance sheet and we don’t have to look for money to pay claims.
How far is Jubilee in cutting its reliance on earnings from the […]
