Insurance sector must evolve to serve Kenya’s aspirations in risk mitigation

Insurance. For many Kenyans, the word alone brings to mind endless paperwork, elusive claims and a service so clouded by technical language that only the most persistent ever benefit.

Yet, behind these barriers lies one of the most powerful tools for building resilience among our communities and businesses —a safety net that can transform a disaster into a merely temporary setback.

The reality is striking. In a country as dynamic as Kenya, insurance penetration hit an all-time low of 2.4 percent in 2024. This situation begs the question: Where have we gone wrong in our approach to insurance? The answer resides in the mindset of everyday Kenyans and in how insurance services are delivered to customers.

We live in an era marked by opportunity and uncertainty. Natural disasters, such as climate change , political turmoil, medical emergencies and abrupt disruptions to business have become part of our collective lived experience.

Yet, for the average Kenyan, insurance is rarely the first port of call. The barriers are numerous: Perceived inaccessibility, cost, a lack of awareness and years of stories about difficult claims processes have left many feeling like insurance is a luxury or even a gamble rather than the basic necessity it truly is.

The need to demystify insurance and make it accessible could not be more urgent. We must move away from the perception of insurance as an afterthought or product for the privileged few.

Insurance, at its core, is about peace of mind and building resilience. It is about knowing that when life happens, as it often will, your family, business and dreams are protected.

One area where change is already taking root is in the model of bancassurance. This concept involves the partnership between banks and insurance providers which brings insurance closer to the customer by integrating it directly into banking experience.

Even though traditional channels such as agents and brokers have long been dominant in Kenya, the rise of bancassurance signals a change in consumer choice.

Gross written premiums from this channel have surged from Sh19.5 billion in 2019 to Sh35 billion in 2023, a 79.4 percent rise, according to the Association of Kenya Insurers.

The data also shows that bancassurance market share expanded from 8.4 percent to 10 percent in the same period.

Why is bancassurance gaining popularity? Banks already enjoy the trust of their customers. For millions, the local branch is a place they visit for a wide array of financial needs.

When insurance is presented as a natural extension of these services—bundled with familiar products, delivered efficiently, with clear information and competitive benefits—it suddenly feels accessible, immediate, and, most importantly, trustworthy.

It is imperative to commit to considerable effort to demystify insurance and provide clear, transparent advice so that customers can confidently make sound decisions.

The question we must keep asking ourselves as a society is what kind of future we want to build.

In an unpredictable world, we have a responsibility to invest in tools that help us weather any storm.

The writer is the Principal Officer, Bancassurance at SBM Bank Kenya