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This presents a unique opportunity for businesses to harness the potential of a youthful and energetic workforce. Without proper safeguards, however, this demographic dividend can easily be eroded by unforeseen events such as critical illness, disability or even death.

At three per cent, Kenya’s insurance penetration is the third lowest in Sub-Saharan Africa with South Africa leading at 17 per cent.

Recent statistics

This has been attributed to several factors including a lack of awareness and the perception of insurance as a ‘grudge purchase’ by many would-be consumers.

However, a closer look at recent statistics from the industry paints a picture of a sector with immense overlooked potential and one that is on the verge of take-off. The data indicates that Kenya’s insurance sub-sector grew by 12.7 per cent in 2023 with net premiums from life insurance and general insurance expanding by 16.0 per cent and 7.7 per cent to Sh149.6 billion and Sh129.5 billion respectively.

Insurance firms operating in Kenya paid out Sh90 billion in benefits in 2023, a 10 per cent increase compared to the previous year, with both investments and assets under management reporting double-digit growth.

These numbers appear significant when interpreted in isolation. However, stacked against comparator economies and considering Kenya’s diversified economy, there is still much room for growth across all product classes.

A research paper by the Association of Kenya Insurers indicates that credit or mortgage and individual life products dominate uptake in insurance products.

This tracks with the economic uncertainty that many people have grappled with in recent years due to shocks such as the pandemic, climate change and rising inflation.

Insurance providers have also been making inroads in other product classes including annuity policies and income drawdown plans.

Absa Life Assurance Kenya is among the leading service providers in the life insurance sector and in recent years we have been modelling our product offering to suit the changing demands of an evolving market.

From a corporate perspective, Absa Life Assurance has been among the top group risk insurance providers, consistently meeting various segment needs including the SME sector which presents an immense growth opportunity.

However, there is an urgent need for operators to scale their offerings by optimizing distribution channels like bancassurance and tapping into technology to grow their market share.

The growth and development of insurance start-ups that deploy digital-first insurance solutions has alerted service providers to an opportunity that exists in the market. The new start-ups are tech-savvy and agile and have a strong pulse on the needs and demands of an emerging Gen-Z clientele.

This has seen some of the most innovative ones deploy products and services faster than market incumbents with much deeper pockets. Consumers are further increasingly turning to self-servicing products and applications. A recent survey found that eight in 10 customers expect self-servicing options that allow them greater autonomy in services such as purchasing policies, lodging claims, and receiving payments.

This further enhances the bottom line of insurance firms by greatly reducing their customer acquisition costs through the deployment of digital offerings.

Service providers should also adopt and apply emerging solutions such as data analytics and artificial intelligence in addition to partnerships that allow for the embedding of insurance products in existing customer-sought-after services or products.

More than half of Kenya’s mobile phone subscribers today use smartphones, and this has created viable use cases for a plethora of platforms that can ease the customer journey and generate new revenue streams for companies. Policyholders at Absa Life for instance have various options through our digital platforms allowing them to obtain a quote, engage an agent or broker or schedule a session with a dedicated consultant.

Using the data gleaned from customers’ digital footprint such as location and transaction patterns, service providers can develop products that are specially targeted and tailor-made for niche consumers across the various product lines.

Developing innovative insurance products and services remains a mainstay for all stakeholders in the sector. This ensures that we not only grow Kenya’s insurance penetration from the three per cent it has stagnated for years but also guarantees that we maintain a healthy and productive workforce.

The writer is head of corporate division, Absa Life Assurance