Why Insurance Is Getting More Expensive in Kenya — And What You Can Do
Introduction: You’re Not Imagining It — Insurance Really Is More Expensive
If you’ve renewed your insurance recently and felt shocked by the price, you’re not alone. Across Kenya, individuals, families, and businesses are asking the same question: “Why has my insurance gone up so much?”
Motor insurance is more expensive. Medical cover feels harder to afford. Business insurance renewals are tougher than before.
At Step by Step Insurance, we speak to clients every day who feel frustrated, confused, and sometimes even mistrustful of insurers because of rising premiums. And while the frustration is valid, the reality is more complex than many people realise.
Insurance in Kenya has become more expensive, but it hasn’t happened randomly — and it hasn’t happened without reason.
In this article, we explain:
- Why insurance costs are rising in Kenya
- The real forces driving premium increases
- Common myths about insurance pricing
- Practical steps you can take to manage your insurance costs
No jargon. No scare tactics. Just clear explanations — step by step.
Key Takeaways
- Insurance premiums are rising primarily due to increased claims, medical inflation, and stricter regulations.
- Motor and medical insurance have been particularly affected by rising costs and fraud.
- Understanding your coverage and working with an advisor can help you manage costs effectively.
- Switching insurers isn’t always the best solution—value and reliability matter more than price alone.
Table of Contents
- How Insurance Pricing Works in Kenya (In Simple Terms)
- What Changed in the Last Year?
- The Real Reasons Insurance Is Getting More Expensive
- Common Myths About Rising Insurance Costs
- What Rising Insurance Costs Mean for You
- What You Can Do About Rising Insurance Costs
- When Switching Insurers Makes Sense
- How an Insurance Advisor Helps Control Costs
- Will Insurance Keep Getting More Expensive?
- Final Thoughts: Paying Smarter, Not Just Paying Less
- Contact & Further Resources
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| Quick Internal Links | |
|---|---|
| How Insurance Pricing Works | What You Can Do About Costs |
| Real Reasons for Price Increases | When to Switch Insurers |
| Common Insurance Myths | Contact & Consultation |
How Insurance Pricing Works in Kenya (In Simple Terms)
Before we talk about rising costs, it helps to understand how insurance pricing works. Insurance is based on risk pooling. Many people contribute premiums into a shared pool, and that pool is used to pay claims for the few who suffer losses.
In Kenya, insurers price premiums based on:
- The likelihood of a claim happening
- The expected cost of that claim
- Past claims data
- Legal and regulatory requirements
- Operating and compliance costs
When claims increase — either in number or cost — premiums must adjust. If they don’t, insurers become financially unstable, which puts policyholders at risk.
This pricing process is monitored and regulated by the Insurance Regulatory Authority, whose role is to ensure insurers remain solvent and can pay claims when they arise.
What Changed in the Last Year?
Over the past 12–18 months, several things happened at once:
| Factor | Impact on Insurance |
|---|---|
| Claims increased faster than premiums | Direct pressure on premium rates |
| Medical and motor insurance experienced sustained losses | Targeted premium increases in these categories |
| Courts awarded higher compensation amounts | Increased liability insurance costs |
| Inflation pushed up repair and healthcare costs | Higher claim values across all insurance types |
| Regulators introduced stricter capital and claims rules | Increased compliance costs and reserve requirements |
Together, these factors reshaped how insurance is priced in Kenya.
The Real Reasons Insurance Is Getting More Expensive in Kenya
1. Rising Claims: The Biggest Driver of Higher Premiums
The single biggest reason insurance costs are rising is claims. In recent years, insurers in Kenya have paid out significantly more in claims than before — particularly in:
- Medical insurance
- Motor insurance
- Liability claims
When claims rise consistently, insurers must increase premiums to keep the system working.
2. Medical Inflation: Healthcare Is Getting More Expensive
Medical inflation in Kenya has outpaced general inflation. Healthcare costs have risen due to:
- Expensive imported medical equipment
- Higher pharmaceutical prices
- Increased use of advanced diagnostics
- Rising operational costs in hospitals
3. Motor Insurance Losses and Fraud
Motor insurance remains one of the most challenging classes of insurance in Kenya. Key issues include:
- Fraudulent accident claims
- Exaggerated repair costs
- Staged accidents
- Bodily injury claims involving “ghost passengers”
| Motor Insurance Challenge | Cost Impact |
|---|---|
| Fraudulent claims | Increases premiums for all policyholders |
| Expensive spare parts | Higher repair costs per claim |
| Increased accidents | More frequent claims payouts |
| Bodily injury claims | Larger settlement amounts |
4. Court Awards and Legal Costs
Another major driver of rising insurance costs is litigation. In recent years:
- Courts have awarded higher compensation amounts for bodily injury claims
- Legal processes have become longer and more expensive
- Insurers face uncertainty when pricing liability risks
5. Stricter Regulation and Capital Requirements
Insurance regulation in Kenya has tightened — and this is a good thing for policyholders. Under risk-based supervision, insurers are required to:
- Hold more capital against risky portfolios
- Improve governance and internal controls
- Strengthen claims reserves
6. Inflation and Economic Pressures
General inflation affects insurance in several ways:
- Higher repair and replacement costs
- Increased healthcare expenses
- Rising administrative and operational costs
Insurance doesn’t just insure risk — it insures replacement value. When replacement costs rise, premiums must follow.
Common Myths About Rising Insurance Costs
Myth 1: “Insurers Are Just Being Greedy”
In reality, most premium increases are driven by claims, inflation, and regulation — not excess profits. Industry data shows that profitability has actually come under pressure in many insurance classes.
Myth 2: “Switching Insurers Always Saves Money”
Switching insurers may lower your premium temporarily, but it can also:
- Expose you to weaker claims support
- Reset waiting periods or exclusions
- Leave gaps in cover
Cheaper is not always better — especially when a claim happens.
Myth 3: “The Cheapest Policy Is the Best Policy”
The cheapest policy often has:
- Narrow cover
- Strict exclusions
- Poor claims service
Insurance should be judged by value, not just price.
What Rising Insurance Costs Mean for You
Why Renewals Feel Tougher
Many policyholders notice that renewals now involve:
- More questions
- Additional documentation
- Stricter underwriting
This isn’t meant to frustrate you — it’s part of better risk assessment and fraud prevention.
Why Claims Are Being Scrutinized More Closely
Insurers are under pressure to:
- Reduce fraud
- Comply with regulations
- Protect honest policyholders
As a result, claims processes are more detailed — but also more structured and transparent.
What You Can Do About Rising Insurance Costs
The good news? You’re not powerless.
1. Review Your Cover — Not Just the Price
Ask:
- Are my cover limits realistic?
- Am I paying for benefits I don’t need?
- Am I underinsured or overinsured?
A proper review often reveals opportunities to optimise cost without sacrificing protection.
2. Adjust Excesses and Deductibles Wisely
Increasing your excess can reduce premiums — but only if you can comfortably afford it during a claim. Higher excess works best for:
- Low-frequency, high-impact risks
- Disciplined risk management
3. Manage Your Claims History
Frequent small claims increase future premiums. In some cases, it makes sense to self-fund minor losses and reserve insurance for major risks.
4. Be Honest During Disclosure
Non-disclosure can:
- Void claims
- Lead to premium loading
- Damage your insurability
Transparency protects you in the long run.
5. Compare Value, Not Just Cost
When choosing insurance, consider:
- Claims reputation
- Financial strength of the insurer
- Clarity of policy wording
- Support during claims
Insurance only proves its value when something goes wrong.
When Switching Insurers Makes Sense — And When It Doesn’t
It Makes Sense When:
- Your risk profile has changed
- Your insurer no longer supports your needs
- You’ve outgrown your current cover
It Doesn’t Make Sense When:
- You’re chasing the cheapest price
- You don’t understand exclusions
- You risk losing continuity of cover
How an Insurance Advisor Helps Control Costs
Working with an advisor like Step by Step Insurance helps you:
- Access multiple insurers
- Match your risk to the right cover
- Avoid unnecessary costs
- Get support during claims
Good advice doesn’t just save money — it saves stress.
Will Insurance Keep Getting More Expensive?
In the short term, pricing pressure may continue — especially in medical and motor insurance. However, stabilising factors include:
- Better fraud controls
- Stronger regulation
- Digital efficiencies
- Improved claims management
Over time, these changes are expected to improve sustainability and fairness.
Final Thoughts: Paying Smarter, Not Just Paying Less
Insurance in Kenya is getting more expensive — but it’s also becoming more structured, regulated, and transparent.
The goal isn’t to avoid insurance costs altogether. It’s to pay smarter, choose wisely, and protect what matters most.
At Step by Step Insurance, we believe that when you understand your cover, you make better decisions — and better decisions lead to better outcomes.
Insurance shouldn’t be confusing. It should work for you — step by step.
Contact & Further Resources
For more detailed analysis of the Kenyan insurance market, read our comprehensive Kenya Insurance Industry Report 2025.
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