(Nairobi) – Bancassurance in Kenya has experienced rapid growth, with premiums rising by 79.4% in 2023, driven by increased demand for credit life and motor insurance.
Bancassurance in Kenya recorded remarkable growth in 2023, with premiums surging by 79.4% to reach KSh 35 billion. According to the Association of Kenya Insurers (AKI), this growth was fueled by credit life insurance premiums increasing by 58.1% to KSh 10.37 billion and motor insurance premiums growing by 81% to KSh 5.995 billion.
The rise in credit life insurance is primarily attributed to banking requirements for borrowers to secure insurance coverage to protect loans against risks such as death or job loss. Additionally, banks providing loans for comprehensive motor insurance significantly contributed to the growth in motor insurance premiums.
Life insurance within bancassurance grew at an impressive 88.6%, outpacing the 72.2% growth in non-life insurance products. This trend reflects a growing consumer preference for life insurance products, driven by the need for financial security and long-term savings.
A report from AKI highlighted that bancassurance premiums grew at a rate significantly higher than the overall insurance industry’s growth of 56.2% during the same period. Non-life insurance, in particular, experienced a 72.2% surge through bancassurance, compared to a 43.4% increase across the broader industry.
The non-life sector’s growth was largely attributed to motor, fire, medical, and theft insurance, with motor insurance accounting for 58.6% of premiums in 2023. This was driven by the increasing demand for comprehensive vehicle coverage.
Data also showed that 21 out of 24 bancassurance intermediaries experienced growth in premiums between 2019 and 2023. Among these, nine intermediaries saw their premiums more than double, underscoring the growing importance of bancassurance as a revenue stream in the insurance industry.
Although bancassurance is still relatively new in Kenya, it currently accounts for 10% of the industry’s gross written premiums. Its rapid expansion highlights its potential to become a significant revenue channel for the insurance sector.