Equity Group has expanded into the pharmaceutical sector through its medical franchise, Equity Afia, in a strategic move aimed at reducing the cost of medicines and, in turn, lowering health insurance premiums.
The lender has already launched its first Equity Afia Pharmacy as part of a pilot programme designed to address one of the biggest cost drivers in healthcare. Pharmaceutical expenses account for nearly half of the operational costs in outpatient services, making them a key area of focus for insurers seeking efficiency.
By integrating pharmacy services into its healthcare ecosystem, Equity hopes to achieve savings that will strengthen its competitiveness in the insurance market. The group currently operates in the short-term insurance segment through its subsidiaries, Equity General Insurance and Equity Health Insurance.
Equity Afia clinics, which are franchised to doctors supported through the bank’s Wings to Fly scholarship programme, play a central role in this model. Patients under Equity’s medical cover are first directed to these facilities, where treatment costs are structured to remain affordable while insurance claims are processed more efficiently.
The expansion comes at a time when the expiry of drug patents is opening the door for more affordable generic medicines. At the same time, concerns over rising drug prices and the circulation of counterfeit medicines continue to challenge Kenya’s healthcare sector.
Equity is joining other insurers that have established pharmacy outlets to better manage healthcare costs. For instance, CIC Insurance runs CIC Pharmacy Limited, while AAR operates its own healthcare facilities.
With over 146 Equity Afia outlets across Kenya and a growing presence in the Democratic Republic of Congo, the group believes tighter control over pharmaceutical supply could significantly reduce outpatient treatment expenses, which often make up more than half of total health insurance costs.
Industry data from the Insurance Regulatory Authority shows that medical insurance claims consume about 75 percent of insurers’ revenue from premiums, leaving a relatively small margin to cover operational expenses and profits. This has forced some underwriters to scale back medical cover portfolios due to sustainability concerns.
Equity’s pharmacy venture is therefore seen as a long-term strategy to improve affordability for patients while enhancing efficiency within the medical insurance value chain.
