(Nairobi) – The value of insurance premiums generated through partnerships between banks and insurance companies grew by 13.3% in 2023, reaching KSh 35 billion. This growth underscores the expanding role of bancassurance in Kenya’s insurance sector, which now accounts for 10% of the industry’s gross written premium (GWP).
According to data from the Association of Kenya Insurers (AKI), the bancassurance GWP increased from KSh 30.88 billion in 2022 to KSh 35 billion in 2023. Over the past five years, the segment has grown by 79.5%, up from KSh 19.5 billion in 2019, when it contributed 8.43% to the industry’s total premiums.
The AKI, in collaboration with Research 8020 Limited, highlighted in its market assessment report that the bancassurance sector’s growth outpaced the overall industry’s expansion during the same period. While the entire insurance industry posted a 56.2% increase in GWP, bancassurance recorded a higher growth rate of 79.4%, signaling its rising importance in expanding insurance penetration.
“In the next five to 10 years, bancassurance could become the largest distribution channel for insurance in Kenya,” said Tom Gichuhi, CEO of AKI. “It has already reached 10% of the industry’s GWP, despite being a relatively new concept in the country.”
The non-life insurance sector has been a significant driver of this growth, achieving a 72.2% increase in premiums through bancassurance compared to 43.4% growth in the broader non-life insurance market. Motor insurance accounted for 58.6% of non-life premiums last year, driven by rising demand for comprehensive vehicle coverage. Other major contributors included fire, medical, and theft insurance.
Of the KSh 35 billion in total bancassurance premiums, KSh 18.52 billion came from non-life insurance products, while KSh 16.48 billion was generated by life insurance products. The growth in life insurance has been supported by credit life, mortgage, and individual life plans.
Between 2019 and 2023, 21 of the 24 bancassurance intermediaries in Kenya reported premium increases, with nine more than doubling their revenues. By the end of 2023, intermediaries generating over KSh 1 billion in premiums controlled 83.5% of the market share.
Research 8020’s manager, Silas Mudachi, attributed the growth to customer-focused strategies, including tailored products with flexible payment options and the use of data analytics for personalized offerings. “Bancassurance is evolving through better use of data, and this is an area with immense potential,” he noted.
The chairperson of the Bancassurance Association of Kenya, Aggrey Mulumbi, called for a review of the regulatory framework to support the sector’s growth. “A rigid regulatory model will hinder this promising initiative. Bancassurance needs tailored policies that align with its unique dynamics,” he said.
As Kenya’s bancassurance sector matures, its impact on insurance penetration—currently under 3%—is expected to grow, providing more individuals and businesses with access to tailored insurance solutions.
Table: Key Bancassurance Statistics (2019–2023)
| Metric | 2019 | 2022 | 2023 | 5-Year Growth |
|---|---|---|---|---|
| Gross Written Premium (GWP) (KSh) | 19.5B | 30.88B | 35B | +79.5% |
| Bancassurance Share of Industry GWP | 8.43% | 9.9% | 10% | +1.57% Points |
| Non-Life Premiums (KSh) | – | – | 18.52B | – |
| Life Premiums (KSh) | – | – | 16.48B | – |