AI advantage: Insurance innovation in Kenya's tech-driven era

The insurance industry, often functioning traditionally, has recently had to play a technology catch-up to a fast-changing business environment. With the business landscape constantly evolving and technology rapidly advancing, artificial intelligence has become more entrenched in everyday life across industries, making it impossible to ignore. Kenya's insurance sector has now actively embraced technology adoption, which is not surprising. Kenya has often tagged the 'Silicon Valley' of Africa, the hub for technology innovations, and the insurance space has fully embraced adoption to remain competitive not only with the sector but with other sectors such as financial services, health, and manufacturing, which are leaps ahead. Artificial intelligence (AI) is rapidly transforming industries across the board, and health insurance is no exception. AI has been a resourceful tool in operational efficiency and improved customer experience. AI applications in healthcare insurance are diverse, and in the last couple of years, its integration has not only brought down costs but also made the data efficient. In operational efficiency, for example, automating routine tasks in healthcare insurance, such as onboarding, claims submission and adjudication, has made policy management and access to healthcare providers seamless. Coming from the Digital Pulse CEO Roundtable stage in 2025, industry leaders highlighted that AI applications, such as automated pre-authorisation and claims processing, have significantly boosted efficiency. Insurance providers in Kenya have introduced AI-powered chatbots that provide real-time responses to insurance inquiries. M-TIBA, which partners with several healthcare providers in Kenya, has seen a 500 per cent increase in daily claims processing through Machine Learning capabilities, with approval times reduced to under a minute. This has increased the turnaround time to 30-60 days compared to traditional, delayed payouts for up to months or even a year. Paperless onboarding and claims have also been a feature to admire in a space previously burdened by mountains of paperwork. Some insurance providers are making the transition towards reducing administrative costs while improving customer experience. AAR Insurance is now transitioning to a fully digital, branchless model with automated onboarding, digital claim submissions and processing, and intelligent document recognition to extract and validate policyholder data. At the 2025 Insurtech Forum, AAR Insurance showcased AI successfully onboarding a 60-year-old onto a medical policy within minutes. It is set to launch an AI-powered wellness insights platform to enhance value and care for its esteemed customers. As an industry improvement, AI is revolutionising personal coverage by developing scalable AI products, including advanced analytics and personalised insurance solutions. A key milestone has been the collaboration between academic institutions, research centres, and technology partners to foster innovation and develop solutions. While this was not possible before due to dispersed volumes of data, AI can easily digest data to gain insights into customer behaviour and preferences by analysing trends and patterns. These are used to tailor offerings more effectively and anticipate customer needs, thereby improving service delivery and customer satisfaction. Another aspect where we have seen an impactful use of AI is in fraud detection and risk assessment. The Insurance Regulatory Authority (IRA) reports that approximately 25 per cent of insurance claims in Kenya are fraudulent. According to Risk and Insurance, globally, AI technologies are expected to save the insurance industry between $80 billion (Sh10.5 trillion) and $160 billion (Sh21 trillion) by 2032 through improved fraud detection and prevention. A great example in this space is utilising anomaly detection, in which Allianz saved $5 million (Sh650 million) in fraudulent claim payouts in the first quarter after deploying AI-powered fraud detection. It's not only fraud but also cost reduction. In terms of regulation, we have seen efforts by the Insurance Regulatory Authority (IRA) that have established sandboxes, allowing insurers and insurtech startups to test innovative technologies in controlled settings, promoting responsible innovation. Additionally, with the enactment of the Data Protection Act in 2019, insurers are mandated to prioritise customer data privacy, ensuring trust in digital platforms. This allows insurers to protect customer information. The impact of AI on healthcare is significant as we can now anticipate customer needs and deliver timely services, despite geographical barriers. Most importantly, we can now predict health issues based on lifestyle to anticipate future health risks, price policies more accurately, and work with customers through preventative wellness programs. - The writer is the group head of technology at AAR Insurance

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