Bancassurance Stakeholders Urge Regulatory Overhaul to Spur Inclusive Insurance Growth
Stakeholders in Kenya’s bancassurance sector are calling for urgent regulatory reforms to align insurance laws with the pace of innovation and evolving consumer needs, warning that outdated policies could stall progress in the country’s fragile insurance market.
Speaking at the 3rd Annual Bancassurance Association of Kenya (BAK) conference in Mombasa, BAK Chairman and KCB Bancassurance Intermediary Managing Director, Aggrey Mulumbi, emphasized the need for a progressive, inclusive framework that reflects today’s digital-first consumer and diverse distribution models.
“While bancassurance has significantly deepened insurance penetration over the last two decades, we must now review the regulatory framework to reflect joint ventures, integrated financial ecosystems, and app-based distribution platforms,” Mulumbi said.
He urged the Insurance Regulatory Authority (IRA) and other stakeholders to co-create a dynamic regulatory environment that not only protects consumers but also fosters innovation by recognizing new players such as fintechs, SACCOs, and telcos.
Recent regulatory changes introduced to enhance transparency and tighten compliance in the insurance sector have sparked concern among banks and insurers. Many argue that the new provisions fail to capture the operational realities of integrated financial services, potentially hindering progress in insurance access.
Old Mutual Group CEO Arthur Oginga called for deeper collaboration between regulators, banks, insurers, and technology providers to unlock growth in a sector where insurance penetration remains low currently at just 2.3%.
“Kenya’s insurance market is underpenetrated, not oversaturated. This is our moment to rethink distribution models and co-create solutions that offer real impact,” Oginga said. He urged the industry to go beyond traditional approaches to tackle emerging risks like climate change, which are exposing individuals and businesses to new vulnerabilities.
IRA Director of Supervision Kalai Musee echoed the need for collaboration, stressing that the financial services sector must empower Kenyans to transition from survival to sustainable financial wellness.
“Insurers, banks, and policymakers have a central role in helping Kenyans secure their futures. We must rethink how we design products, deliver services, and support customers with the tools they need,” Musee said.
With insurance penetration still below 3%, industry players cautioned that abrupt or uncoordinated regulatory shifts could disrupt current momentum. They called for reform processes that are consultative, balanced, and designed to unlock inclusive insurance growth without destabilizing the market.
