Bancassurance Market Growth in Kenya: A Local Perspective on a Global Trend
Kenya’s bancassurance market is mirroring global growth trends, with the sector expanding rapidly and playing a pivotal role in deepening insurance penetration across the country. While the global bancassurance market is projected to reach a premium volume of $2.4 trillion by 2025, growing at an annual rate of 5.5%, Kenya’s own bancassurance sector has demonstrated remarkable momentum in recent years.
Key Takeaways
- Bancassurance premiums in Kenya grew by 79.4% over five years (2019-2023)
- Market share increased from 8.4% to 10% of total insurance premiums
- Banking network reach, SME segment focus, digital transformation, and regulatory support are driving growth
- Despite growth, overall insurance penetration remains below 3%, indicating significant potential
Table of Contents
Kenya’s Bancassurance Performance
Gross written premiums from bancassurance channels in Kenya surged from KES 19.5 billion in 2019 to KES 35 billion in 2023, representing a 79.4% growth over five years.
The market share of bancassurance in total insurance premiums increased from 8.4% to 10% during the same period, underscoring its growing importance in the insurance landscape.
In 2023, bancassurance accounted for nearly 10% of all insurance premiums written in Kenya, with non-life premiums reaching KES 18.5 billion and life premiums at KES 16.5 billion.
| Metric | 2019 | 2023 | Change |
|---|---|---|---|
| Gross Written Premiums | KES 19.5 billion | KES 35 billion | +79.4% |
| Market Share | 8.4% | 10.0% | +1.6% |
| Non-life Premiums (2023) | – | KES 18.5 billion | – |
| Life Premiums (2023) | – | KES 16.5 billion | – |
Key Drivers of Growth
Banking Network Reach
Kenya’s banking sector, with over 40 licensed commercial banks and more than 1,500 branches nationwide, provides an extensive distribution network for insurance products, making bancassurance a natural fit for expanding access.
SME Segment
Small and medium-sized enterprises (SMEs) are emerging as a key growth segment, with tailored insurance solutions distributed through banks helping to address the unique risks faced by these businesses.
Digital Transformation
The adoption of digital platforms and data-driven solutions is streamlining product offerings, improving customer experience, and driving further uptake of bancassurance products.
Regulatory Support
High compliance rates (over 90%) among bancassurance agencies and ongoing engagement with regulators are fostering a transparent and trustworthy environment, which is essential for sustained growth.
Challenges and Opportunities
Penetration Remains Low
Despite robust growth, insurance penetration in Kenya remains below 3%, indicating significant untapped potential for bancassurance to reach new customer segments.
Claims and Loss Ratios
As premiums have grown, so have claims, with incurred losses rising from KES 6.5 billion to KES 14 billion between 2019 and 2023. Non-life loss ratios increased from 43.9% to 52%, though still better than the industry average of 67%.
Market Concentration
Nine out of 24 licensed bancassurance agencies contributed over 83% of the gross written premium, suggesting room for more players to innovate and compete.
Looking Ahead
The outlook for Kenya’s bancassurance market is positive, with continued growth expected as banks and insurers deepen collaboration, digital solutions mature, and regulatory frameworks evolve to support innovation. As the global market surges toward the $2.4 trillion mark, Kenya’s experience demonstrates how local adaptation of global trends can drive both financial inclusion and sectoral growth.
In summary, Kenya’s bancassurance market is a dynamic and growing segment, well-positioned to play a central role in the country’s evolving financial services ecosystem, and to contribute meaningfully to the broader global expansion of bancassurance.
Related Resources
Source: AKI Releases State of the Bancassurance Market in Kenya 2024
