insurance outlook report 2025

The Insurance Outlook Report 2025 by Deloitte offers an in-depth analysis of East Africa’s insurance landscape—covering Kenya, Tanzania, Uganda, and Ethiopia—and highlights the forces reshaping the sector from AI innovations to climate-driven risk, ESG imperatives, IFRS 17 adoption, and regulatory reforms. For businesses, policyholders, and industry observers in Kenya, understanding these trends is vital to making informed coverage decisions, optimizing risk management, and staying competitive in a rapidly evolving market.

In this blog post, we’ll unpack the key insights, country-level data, emerging trends, and actionable takeaways from the Insurance Outlook Report 2025, tailored specifically for the Step by Step Insurance audience. Whether you’re a small enterprise shopping for the best policy, a corporate risk manager preparing for IFRS 17, or simply curious about the future of insurance in East Africa, this guide is your one-stop reference.

Top Takeaways from the Executive Summary

East Africa’s Insurance Sector Resilience & Growth

Over the past decade, East Africa’s insurance sector has shown remarkable resilience and adaptability despite economic volatility, shifting customer needs, and global uncertainties.

• Gross Written Premiums (GWP) have grown steadily year-on-year across life and non-life segments.
• Shareholders’ equity has risen, providing insurers with stronger capital buffers to weather shocks and invest in innovation.
• Insurance penetration, however, remains low (averaging 1–2% vs. a 7% global average), underscoring untapped opportunities.

Innovation Drivers: AI, ESG, Demographics & IFRS 17

Deloitte identifies four pivotal forces accelerating industry transformation:

• AI Agents & Data Architectures – From siloed databases to data lakehouse models, insurers are harnessing AI for smarter underwriting, automated claims, real-time fraud detection, and personalized customer engagement.
• Environmental, Social & Governance (ESG) – Underwriters are embedding ESG into risk assessments, product design, and investment portfolios to meet stakeholder expectations and regulatory demands.
• Demographic Optimization – Tailoring products for young adults, middle-aged families, and retirees, while balancing urban digital channels with rural agent networks.
• IFRS 17 Adoption – The new accounting standard demands contract-level reporting, risk margin calculations, and revenue recognition changes, prompting system overhauls and deep collaboration between actuarial and finance teams.

Climate Change & Regulatory Shifts

• Climate Risk: Rising weather-related losses are driving demand for climate-resilient insurance and parametric products in agriculture and property lines.
• Regulatory Environment: From Kenya’s transition to the Social Health Insurance Fund (SHIF) to Uganda’s forthcoming Takaful framework and Ethiopia’s new independent insurance regulator, policy developments are expanding coverage mandates and protecting consumers.

Country-Level Insights in the Insurance Outlook Report 2025

Kenya Insurance Outlook 2025

Life Insurance

• GWP Growth: Life premiums climbed steadily from USD X million in 2015 to USD Y million in 2023.
• Product Mix:
  • Deposit Administration (private pensions) has surged, fueled by mandatory NSSF Tier II contributions.
  • Annuities & Ordinary Life show stable, gradual upticks as retirees seek income security.
  • Group Life & Pensions benefit from employer schemes and regulatory tax incentives.

General Insurance

• Top Classes: Motor (private & commercial) and Medical lines account for over 50% of GWP, but also carry high loss ratios (71–79%).
• Claims & Expense Ratios:
  • Claims Ratio jumped to 68% in 2023, driven by motor, medical, and aviation sectors.
  • Expense Ratio remains stable around 30%, highlighting operational efficiency needs.
• Competitive Landscape:
  • Top 3 insurers hold 25% market share; Top 10 dominate 66%.
  • Equity Life Assurance achieved a CAGR of 18% from 2013–2023, propelled by bancassurance integration.

Insurer	Market Share (2023)	CAGR (2013–2023)
Equity Life Assurance	9%	18%
CIC Insurance	12%	5%
Britam	8%	4%
APA	6%	3%
Others (Top 10)	31%	avg 2%

Case Study: Equity Life Assurance executed a digital transformation in 2022, integrating its AI-powered underwriting engine with mobile banking channels and reducing policy issuance time from 3 days to 3 hours.

Tanzania Insurance Outlook 2025

Life Insurance

• GWP rose to USD 101.3 million in 2023 (up 6% from 2022).
• Product Split:
  • Group Life still dominates (83%) but saw only 5% growth.
  • Individual Life jumped 22% to USD 17.6 million, signaling rising consumer awareness.

General (Non-Life) Insurance

• Market Size: GWP reached USD 373 million (+6.2%).
• Class Performance:
  • Motor: USD 130 million (+18%).
  • Fire: USD 68 million (+15%).
  • Engineering & Marine: +7% and +5.7% respectively.
• Ratios: Expense ratio steady at 45%; claims ratio climbed to 57.8%, resulting in underwriting losses in 2023.

“Digital-first insurers targeting urban millennials are reshaping Tanzania’s group life market,” says a TIRA executive.

Uganda Insurance Outlook 2025

Life Insurance

• Penetration: 0.867% of GDP in 2023 (down slightly from 0.885%).
• GWP grew 21.9% to USD 166.8 million.
• Product Trends:
  • Individual Life leads (avg 18% CAGR).
  • Medical soared 54% CAGR, reflecting post-pandemic health focus.
• Top Players: Prudential Assurance (25% share), ICEA Lion, Old Mutual, Jubilee, Sanlam.

General Insurance

• GWP of USD 247 million (+3.8%).
• Operating Ratios:
  • Expense ratio fell from 20% to 18%.
  • Claims ratio stable at 22–23%.
• Class Growth: Engineering (+13% CAGR), Liability (+11%).
• Market Leaders: UAP Old Mutual (54%), Sanlam General, Jubilee Allianz.

Ethiopia Insurance Outlook 2025

Market Overview

• Penetration: ~0.3%, one of the lowest globally.
• Players: 18 insurers + 3 reinsurers; state-owned Ethiopian Insurance Corporation leads with 30% share.
• Currency Impact: Premiums grew in local birr but declined in USD terms due to depreciation.

Non-Life Insurance

• GWP slightly down vs. 2022, with motor third-party mandates driving volume.
• Emerging Lines: Engineering (infrastructure projects) and cargo/aviation insurance.
• Regulatory Reform: Establishment of an independent insurance regulator by June 2025, opening doors to foreign entrants.

Emerging Trends Shaping Insurance in 2025

AI’s Transformative Journey in Insurance

Modern insurance is powered by data lakehouse architectures that unify storage, analytics, and governance. Key AI applications include:

Smarter Underwriting

• Real-time risk assessment using telematics, satellite imagery, and IoT sensors.
• Dynamic pricing: premiums adjust based on driving behavior or health metrics from wearables.

Automated Claims Processing

• Computer vision analyzes damage photos; OCR/NLP extracts data from forms.
• Settlement times drop from weeks to hours.

Fraud Detection

• AI models flag anomalies by cross-referencing large datasets, uncovering fraud rings.
• Voice/facial recognition secures identity in claims interviews.

Personalized Engagement

• Chatbots powered by retrieval-augmented generation (RAG) deliver 24/7 support.
• Sentiment analysis detects dissatisfaction and escalates to humans proactively.

Regulatory Compliance

• AI agents monitor new regulations, auto-generate compliant policy documents.

ESG & Climate Change Impact

Environmental, Social, and Governance factors are rapidly moving from buzzwords to core business drivers:

• Underwriting: Integrate climate stress-tests and ESG risk scores into premium calculations.
• Investments: Shift toward renewable energy, green bonds, and climate-resilient infrastructure.
• Products: Launch parametric and catastrophe bonds for agriculture, property, and smallholder farmers.
• Reporting: Align disclosures with GRI, SASB, and TCFD frameworks to build stakeholder trust.

Optimising Insurance Across Demographics

Different customer segments demand tailored approaches:

Segment	Preferences & Needs	Distribution Channels
Young Adults (18–35)	Price-sensitive, tech-native, open to microinsurance	Mobile apps, WhatsApp bots
Middle-Aged (36–55)	Family protection, pensions, mix of digital + advisory	Hybrid: branches + online
Retirees (55+)	Face-to-face service, annuities, health riders	Agent networks, phone support
Urban vs. Rural	High digital adoption vs. limited connectivity	App/USSD in cities; agents in villages

Best Practices:

• Develop microinsurance for gig and informal workers.
• Partner with mobile money providers (e.g., M-Pesa) for premium collection.
• Offer USSD claims tracking for low-smartphone users.

IFRS 17 in the Insurance Outlook Report 2025

The new accounting standard brings both pain and gain:

Key Challenges:

• Contract Grouping & Data Granularity – Requires policy-level cash flows and risk adjustments.
• System Overhauls – Legacy IT must integrate actuarial models with finance ledgers.
• Skill Gaps – Need for professionals fluent in both actuarial science and financial reporting.

Business-As-Usual (BAU) Benefits:

• Reduced equity volatility through standardized revenue recognition.
• Transparent disclosures that strengthen investor confidence.
• Enhanced agility via automated reporting pipelines and clearer KPIs.

The Changing Regulatory Environment

Rapid policy shifts are broadening coverage and consumer protections:

• Kenya: Transition to SHIF under Universal Health Coverage; private insurers must align offerings by 2026.
• Uganda: Launch of Takaful framework for Sharia-compliant products, targeting Muslim communities.
• Tanzania: Mandated insurance for public infrastructure (schools, hospitals, markets) to safeguard assets.
• Ethiopia: Independent insurance regulator spun off from the central bank by June 2025, paving the way for foreign market entry.

These reforms drive inclusion, strengthen consumer trust, and create new growth avenues.

Opportunities & Challenges Ahead

Key Opportunities from the Insurance Outlook Report 2025

• Digital Transformation & Insurtech: Automate underwriting, claims, and distribution.
• Microinsurance Expansion: Tailored, on-demand products for low-income and informal sectors.
• Cross-Industry Partnerships: Banks, telcos, and agritech firms co-create bundled offerings.
• Infrastructure Projects: Insure mega-projects from roads to renewable energy assets.

Persisting Challenges

• New Entrants & Competition: Safaricom and Equity Group entering as brokers/insurers.
• Fraud Hotspots: Motor and medical lines remain vulnerable despite AI countermeasures.
• Low Uptake & Affordability: Premiums still unaffordable for many households.
• Regulatory Complexity: IFRS 17, SHIF, Takaful, and multiple ESG frameworks strain compliance teams.

What the Insurance Outlook Report 2025 Means for You

For Consumers & SMEs

• Leverage AI-Driven Products: Seek insurers offering telematics-based auto cover or wellness incentives on health plans.
• Choose ESG-Aligned Policies: Support underwriters investing in green infrastructure and sustainable projects.
• Prepare for IFRS 17: If you’re a broker or corporate buyer, anticipate more detailed premium allocations and disclosure requirements.

For Corporate & Large-Scale Buyers

• Integrate Climate Risk: Embed parametric and catastrophe solutions into your risk portfolio.
• Enhance Compliance Readiness: Partner with advisors to streamline IFRS 17 reporting and audit processes.
• Explore Takaful & SHIF: For organizations operating regionally, aligning employee benefits with local regulatory models ensures consistent coverage and cost efficiency.

Frequently Asked Questions (FAQ)

Conclusion

The Insurance Outlook Report 2025 paints a picture of an industry at the crossroads of technology, sustainability, and regulation. From Kenya’s booming pensions market to Tanzania’s motor-driven growth, Uganda’s health-focused surge, and Ethiopia’s liberalization, opportunities abound—but so do challenges in fraud, affordability, and compliance.

By staying informed, embracing innovation, and aligning with ESG and IFRS 17 requirements, both consumers and corporate buyers can navigate this evolving landscape with confidence.