The rate of Insurance penetration in Kenya has remained historically low compared to other major economies, with the insurance penetration coming in at 2.3% as at FY’2022, according to the Kenya National Bureau of Statistics (KNBS) 2023 Economic Survey.
The low penetration rate, which is below the global average of 7.0%, according to Swiss RE Institute, is attributable to the fact that insurance uptake is still seen as a luxury and mostly taken when it is necessary or is a regulatory requirement.
In addition, a large portion of the Kenya’s work force is in the informal sector, making up approximately 83.0% of the total working population, where there are no strict regulations for taking up insurance plans.
Insurance penetration remained unchanged at 2.3% in 2022, similar to what was recorded in 2021 and 2020, despite the economic recovery that saw an improved business environment.
Over the period, insurance penetration in Africa has remained low compared to other developed economies, averaging 3.2% in 2022, mainly attributable to lower disposable income in the continent and slow growth of alternative distribution channels such as mobile phones to ensure a wider reach of insurance products to the masses.
In addition, insurance products are often not tailored to specific needs of the local population, which can discourage uptake among the population.
South Africa remains the leader in insurance penetration in the continent, with a penetration rate of 10.0% in 2022, owing to a mature and highly competitive market, coupled with strong institutions and a sound regulatory environment.