Digital push seen as key to unlocking Kenya's insurance market

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Insurance penetration in Kenya stands at barely three per cent, a stubborn lag that has persisted despite broader growth in financial services.

To avert the crisis, stakeholders recommend that the industry confronts three core barriers, including access, relevance and trust.

Kenya’s insurance sector has historically relied heavily on intermediaries, particularly agents and brokers, to distribute products, educate customers, collect leads and maintain client relationships.

This remains important because insurance is still a trust-based product. “We don’t see digital as a replacement; we see it as an enhancement of the agent. And with Africa being a fairly young continent, we are seeing a shift in how they access financial services. Most of our young population prefer digital firstchannels.”,” says the Managing Director for Old Mutual business unit, Dr Isaac Nzyoka.

He adds that with the emergence of digital technology, digital banking and lending, as well as the push for digital insurance, this shift is informing how players in the industry need to look at how to deliver financial services to the emerging demographic.

Nzyoka says many customers need guidance before buying cover, especially for health, pension, business protection, and long-term savings products. This is because customers are increasingly comfortable using digital channels for financial services, payments, shopping, banking and customer support. 

This shift is creating an opportunity for insurers to simplify the insurance journey by allowing customers to compare products, receive quotations, buy cover, pay premiums, renew policies, make claims and access support through digital platforms.  

“Through digitisation, we become more relevant to the consumer; the emerging demographic is digitally fast because they access these tools.

The push to digital is responding to the market and emerging market trends,” said Nzyoka, adding that digital gives consumers options while enabling agents and advisors.

The average consumer today has access to technology and information, as they can assess, compare and check what other people are doing through social media.

“As a player in the market, digital means we are at the forefront of ensuring that we are accessible to our customers. We have invested significantly for the last three years,” Nzyoka said.

The opportunity is significant because Kenya’s insurance penetration remains low.    A 2025 report by the Association of Kenya Insurers (AKI) shows that insurance penetration rose to 2.44 per cent in 2024, from 2.41 per cent in 2023, with gross written premiums hitting Sh395.3 billion against a GDP of Sh16.2 trillion.

This means the industry is growing, but insurance is still not reaching enough households and businesses. The intermediary network remains a major part of the insurance ecosystem. In 2024, the Insurance Regulatory Authority’s (IRA) Annual Industry Data lists 15,000 licensed insurance agents and 237 insurance brokers, up from 14,648 agents and 226 brokers in 2023.  

This shows that even as digital channels grow, Kenya still has a large human distribution network that cannot simply be ignored. 

“We see some underlying gaps in the market,” Nzyoka says.

Customer preferences are shifting rapidly, particularly among retail and SME segments, fueled by Africa’s young, digitally native population in its early 20s.

“We do see continued growth on the corporate side, but we’re seeing more significant shifts on the retail and SME segment,” he adds.

Macroeconomic pressures shape these changes. Old Mutual’s Financial Wellness Monitor revealed rising cost-of-living strains, with more Kenyans borrowing for daily needs rather than business expansion or wealth building.

But Nzyoka says with digital innovation, the sales process is much easier for agents as the cost of running the operation is likely to be low, as the agents are semi-independent.

Like any sector, the insurance industry also faces a myriad of challenges such as persistent threats which include climate events like floods and drought, health risks and data protection concerns, which all heighten the demand for resilience tools even as consumers face tight budgets.

Nzyoka says digitisation of the insurance industry addresses these realities. “Digital allows us to deliver our services in a way that consumers can go online, search, find, compare, decide and start the purchase,” Nzyoka explained.

According to Nzyoka, Digital sales grew by 50 per cent over the past three years, with the growth rate still increasing.

Investments in Customer Relationship Management platforms, process automation and tools like live chat, blending digital agents with human support, have improved service efficiency and customer experience scores.

The strategy targets the informal economy, where most consumers operate with uneven cash flows, unlike formal salaried structures.

 “The Kenyan economy and most African economies are more informal now. “The majority of consumers are informal,” Nzyoka said.

With the traditional models serving the corporates well and the corporate-led coverage remaining roughly 80 per cent, digital tools aim to extend protection to underserved retail and SME segments.

“We want to shift that mix. By 2030, we should be well over 35 to 40 per cent of revenues,” Nzyoka projected.

This shift would expand financial inclusion on the protection side, complementing gains in banking and mobile money.

According to Nzyoka, agents and brokers remain central rather than sidelined. Digital platforms equip agents with digital quotations, policy issuance, lead management and service capabilities.

“Digitally, we are certainly making our agents smarter. And sell more,” Nzyoka said.

Nzyoka reveals that earlier data from the platform’s launch shows month-on-month sales growth exceeding 30 per cent among onboarded agents, with lower operating costs as travel to branches declines.

Challenges persist, including internet penetration gaps and risks around digital interactions. Nzyoka emphasises hybrid approaches which involve customers’ choice between direct digital and advisor channels, plus technology for needs assessment and qualified leads.

“The role of the agent or the advisor remains, more so actually during this period,” Nzyoka adds.