Mombasa: In the wake of rapid technological transformation, insurance brokers have been urged to invest strategically in cybersecurity to curb the risks of money laundering and terrorism financing and to help Kenya exit the Financial Action Task Force (FATF) grey list. Speaking in Mombasa during the 19th Annual Conference of the Association of Insurance Brokers of Kenya (AIBK), Senior Counsel (SC) Mohammed Nyaoga highlighted the shift in threats from physical to digital as the industry embraces technology, necessitating enhanced safeguards.
According to Kenya News Agency, the four-day conference has brought together more than 500 insurance practitioners under the theme ‘The Future of Insurance: Igniting Innovation, Securing Tomorrow’. SC Nyaoga emphasized the importance of implementing adequate safeguards to ensure customer confidence and trust in digitally driven systems that hold their data.
SC Nyaoga noted the growing integration of technology in the insurance sector has the potential to enhance efficiency and improve customer satisfaction. He revealed that over 70 per cent of insurers in the country are accessible through mobile applications, portals, and chatbots, allowing customers to buy policies, submit and track claims, and obtain personalized customer care support from their homes.
He further explained that the adoption of technology could increase efficiency and reduce administrative costs through automation of routine tasks, leading to faster task performance at lower costs and improved customer satisfaction. Technologies such as Artificial Intelligence and Machine Learning have transformed key aspects of underwriting, risk assessment, and fraud detection, making it easier to detect fraud more accurately and limiting exposure compared to manual approaches.
SC Nyaoga also pointed out that technology has led to innovative products, including telemedicine and micro-insurance models, which have lowered the threshold for access to insurance and supported programs like Universal Health Coverage. He urged insurers to anticipate challenges and reconfigure strategies to thrive in the digital ecosystem, emphasizing the need to retool boards, management, and staff for optimal performance.
AIBK National Chairman John Lagat acknowledged that the sector is at a crossroads with technology, customer expectations, regulatory changes, global risks, and local realities converging, offering both challenges and opportunities. He noted the exciting front of innovation, with the interplay of mobile-money infrastructure, fintech, and insurance in Kenya yielding new models of inclusive insurance like pay-as-you-go, peer-to-peer insurance, microinsurance, and embedded insurance.
Lagat highlighted that insurers are adopting artificial intelligence and leveraging data analytics to tailor products to specific geographies, customer segments, and risks. He cited examples of Kenyan insurers leveraging data, digital partnerships, and new distribution models to strengthen businesses and the ecosystem.
However, Lagat noted that Kenya’s insurance penetration remains significantly below global averages, with levels under three per cent compared to the global average of over seven per cent. Despite this, he pointed out consistent growth in the sector, positive net income growth across many listed insurance companies, and structural foundations for sustainable growth with digital channels, data analytics, inclusive models, and regulatory reform.
Concerns were also raised about reporting structures and penalties for brokers not complying with Financial Reporting Centre (FRC) provisions and demands. Kenya was placed on the FATF grey list in 2024 due to gaps in its Anti-Money Laundering (AML), Counter-Terrorist Financing (CFT), and Counter-Proliferation Financing (CPF) frameworks. Insurance Regulatory Authority (IRA) CEO Godfrey Kiptum urged brokers to lead efforts in ensuring Kenya’s removal from the grey list, emphasizing it as a matter of public good and encouraging compliance with requirements.
