Bancassurance has experienced remarkable growth in Kenya, with premiums generated by the channel soaring by 79.4% in 2023, significantly outpacing the overall insurance industry's growth of 56.2% during the same period, according to a report by the Association of Kenya Insurers (AKI).
In its report, titled “Evaluating the dynamic landscape of bancassurance in Kenya — Market Assessment Report Presentation (2024)” released last week, AKI says that this surge is particularly notable in the non-life insurance sector, which saw a 72.2% increase in premiums from bancassurance, compared to a more modest 43.4% growth in the broader general insurance industry.
While bancassurance has experienced strong growth, profitability pressures are emerging. Claims have surged to KES14.16bn ($110m) from KES6.55bn in 2019 in 2023, closely mirroring the rapid increase in premiums. This trend raises concerns about underwriting practices and claims management, particularly evident in the non-life insurance segment, where the loss ratio escalated from 43.9% to 52.0%.
Notably, bancassurance has maintained a stable market presence, consistently capturing approximately 10% of the overall insurance market. Its market share has shown resilience, increasing from 8.43% in 2019 to stabilising between 9.69% and 9.89% from 2020 to 2023. Within this framework, the general insurance segment has demonstrated steady growth, reaching 9.68% by 2023.
Twenty-one out of 24 bancassurance intermediaries reported increases in premiums from 2019 to 2023. Notably, nine intermediaries more than doubled their premiums during this period. By 2023, intermediaries generating over KES1bn in premiums commanded a substantial 83.5% market share. Additionally, unregistered entities also experienced significant growth, rising by 69.8%.