Kenya’s bancassurance sector is pushing for urgent innovative policy reforms to better serve evolving customer needs and drive inclusive insurance growth in an underpenetrated market.
BAK Chairman and KCB Bancassurance Intermediary MD Aggrey Mulumbi called for urgent policy shift to reflect digital-first consumers, varied distribution models, and emerging financial ecosystems.
Mulumbi was addressing insurance sector stakeholders during the 3rd Annual Bancassurance Association of Kenya (BAK) Conference held in Mombasa County.
“We have made considerable progress in deepening insurance penetration through bancassurance over the past two decades, but we must now take a step further,” said Mulumbi.
He added: “We need to relook the regulatory framework to reflect today’s realities, including digital-first consumers, joint ventures, integrated financial ecosystems, and emerging platforms.”
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He noted that current legislations are outdated and overlook the critical roles SACCOs, fintechs, telcos, and digital-first intermediaries play in the current insurance value chain.
He asked the Insurance Regulatory Authority (IRA) and other industry stakeholders to create on a modern and inclusive framework that enables innovation, safeguards consumers and ensures market stability.
The call for reform comes amid fresh concerns over recent regulatory changes introduced as part of a broader agenda to improve compliance and transparency in the insurance sector.
Though the reforms were meant to enhance governance and accountability, banks and insurance players say they don’t address the operational dynamics of integrated financial service providers.
Players warn that rolling out rules without wider industry consultation could slow down progress in a market still fragile and struggling to push past a 2.3 per cent penetration rate.
Old Mutual Group CEO Arthur Oginga challenged the industry to shift from competition to collaboration, noting that insurance opportunities lie in expansion, not market share battles.
“At 2.3 per cent penetration, Kenya’s insurance market is underpenetrated, not oversaturated,” noted Oginga.
He added: “This is an opportunity for innovation, for rethinking distribution, for deepening partnerships beyond transactional arrangements and into co-creation for real, sustainable impact.”
He urged regulators, banks, insurers, and tech innovators to work together to design solutions for emerging risks, particularly those tied to climate change and economic volatility.
Recent data indicates that bancassurance has grown to be one of the most effective tools for deepening insurance inclusion, especially in rural and underserved communities.
By leveraging banks’ vast distribution networks and trusted customer relationships, insurers have been able to bring protection to sectors previously excluded from traditional channels.
But with new consumer behaviours, digitisation, and non-traditional platforms expanding rapidly, stakeholders in the insurance sector say it is time for the model to evolve further.
IRA Director of Supervision Kalai Musee reiterated the need for the industry to move from short-term survival to long-term resilience by embracing a customer-first mindset.
“Kenya’s financial services sector, including insurers, banks, and policymakers, have a central role to play in helping Kenyans move from survival mode to building true, sustainable financial wellness,” intimated Musee.
Musee added: “This calls on the industry to rethink how we design products, how to deliver services, and how we empower customers with the tools and advice they need to secure their future.”
As the reform push gains momentum, players are warning that regulatory changes must be gradual and strategic to protect gains made and maintain growth in the volatile industry.
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