Insurance industry stakeholders have been urged to fully embrace technology, strengthen execution, and improve customer experience in order to address operational inefficiencies, increase insurance penetration, and drive sustainable sector growth.
Speaking in Nairobi on Thursday during the InsurTech Forum, Deloitte East Africa Partner and Actuarial and Insurance Solutions Leader Timothy Machira said insurers continue to lose significant value across the insurance value chain due to high acquisition costs, weak underwriting practices, fraud, operational inefficiencies, and poor customer retention.
Machira noted that despite steady economic growth and rising wealth in East Africa, insurance penetration remains low, with Kenya recording the highest rate in the region at approximately 2.5 percent—still below the global average.
“More people are accessing financial services, but that has not translated into greater use of insurance products,” he said.
He attributed the low uptake to high premiums, products that do not adequately meet customer needs, limited public awareness, and low trust levels in insurance providers.
According to Machira, insurers should redesign products based on customer needs, strengthen market segmentation, and adopt data-driven pricing models to improve affordability and relevance.
He observed that poor risk pricing, fragmented customer data, and duplicated underwriting processes continue to erode profitability across the sector.
Claims management, he added, remains one of the biggest sources of value leakage, driven by fraudulent claims and weak recovery and subrogation processes.
“Insurance companies should strengthen fraud detection systems and automate claims management to improve efficiency and reduce losses,” Machira said.
He also called on insurers to digitise finance and reporting systems, noting that automation would reduce compliance costs, strengthen internal controls, and improve operational efficiency.
On customer experience, Machira urged insurers to leverage data analytics to personalise services and enhance engagement throughout the customer journey.
He shared a personal experience in which a hospital consistently followed up on his daughter’s recovery after discharge, while his health insurer remained silent.
“The hospital-built trust through simple follow-up calls. Customer engagement is not just about paying claims but about maintaining meaningful relationships,” he said.
Machira further recommended that insurers adopt predictive analytics and artificial intelligence to identify customers likely to lapse and detect potentially fraudulent claims before losses occur.
He challenged industry leaders to move beyond measuring routine activities and instead focus on the quality of business decisions and financial outcomes.
He proposed performance indicators such as underwriting expense ratios, customer acquisition costs, pricing adequacy, fraud detection accuracy, customer retention rates, cross-selling performance, and process automation efficiency.
Meanwhile, Association of Kenya Insurers (AKI) Research and Education Manager Hazel King’ori said technology has become central to how insurance companies compete, innovate, and build customer trust.
“Insurance remains insurance, but what makes the difference today is technology. It is at the centre of how we compete, innovate, serve customers and build trust,” she said.
King’ori noted that AKI represents 55 insurance companies offering both life and general insurance products, as well as five associate members, and continues to promote research, advocacy, capacity building, and consumer awareness within the sector.
She observed that discussions on digital transformation have evolved significantly since the first InsurTech engagement in 2024, shifting from theoretical adoption to practical implementation.
“The question today is no longer whether we should adopt technology, but how we use it every day to improve efficiency, productivity and customer experience,” she said.
King’ori added that insurers are operating in an increasingly complex environment characterised by rapid technological change and expanding regulatory requirements, including IFRS 17 and the upcoming IFRS Sustainability Disclosure Standards (IFRS S1 and S2).
She stressed that insurers must remain customer-focused, noting that consumers now compare insurance services with digital experiences offered by banks, airlines, and other technology-driven industries that prioritise speed, convenience, and transparency.
King’ori emphasised that collaboration between insurers, regulators, innovators, and technology partners will be essential for the industry to adapt to evolving customer expectations and emerging technologies.
“No organisation can afford to work in isolation. Our success will depend on how well we learn, collaborate and work together,” she said.
Closing the forum, Insurance Institute of Kenya Chairperson Peter Kagia urged industry leaders to shift focus from strategy formulation to effective execution.
He noted that emerging technologies such as artificial intelligence and automation present significant opportunities, but their success depends on disciplined implementation.
“Execution is the strategy. Real value lies in improved customer experience, operational efficiency, stronger risk management and sustainable growth,” Kagia said.
He observed that many organisations fail not because they lack ideas, but due to weak focus, lack of discipline, and inconsistent execution.
Kagia called for the development of future-ready organisations that balance innovation with accountability and measurable results.
“As this forum has grown, it has become more than a conversation about innovation. It is now a platform for practical execution and measurable impact,” he said.
He further challenged participants to prioritise critical actions, eliminate outdated practices, and deliver tangible results that strengthen customer outcomes and the insurance sector as a whole.
by Nyawira Githinji and Sallo Gobana
