Nairobi: 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 highlighted the value loss within the insurance value chain due to high acquisition costs, weak underwriting practices, fraud, operational inefficiencies, and poor customer retention.
According to Kenya News Agency, 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. He cited high premiums, inadequately tailored products, limited public awareness, and low trust levels in insurance providers as key factors for the low uptake of insurance products.
Machira emphasized the need for insurers to redesign products based on customer needs, strengthen market segmentation, and adopt data-driven pricing models to improve affordability and relevance. He pointed out that poor risk pricing, fragmented customer data, and duplicated underwriting processes continue to erode profitability across the sector. Claims management, driven by fraudulent claims and weak recovery and subrogation processes, remains a significant source of value leakage, according to Machira.
Furthermore, Machira urged insurers to digitise finance and reporting systems, noting that automation would reduce compliance costs, strengthen internal controls, and improve operational efficiency. He called on insurers to leverage data analytics to personalise services and enhance engagement throughout the customer journey, sharing a personal experience to illustrate the importance of customer engagement.
Machira also 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 focus on the quality of business decisions and financial outcomes, proposing 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 emphasized the central role of technology in how insurance companies compete, innovate, and build customer trust. She noted that discussions on digital transformation have shifted from theoretical adoption to practical implementation since the first InsurTech engagement in 2024.
King’ori stressed that insurers must remain customer-focused, as consumers now compare insurance services with digital experiences offered by technology-driven industries like banks and airlines. She highlighted the importance of collaboration between insurers, regulators, innovators, and technology partners to adapt to evolving customer expectations and emerging technologies.
Closing the forum, Insurance Institute of Kenya Chairperson Peter Kagia urged industry leaders to shift focus from strategy formulation to effective execution. He emphasized the significant opportunities presented by emerging technologies such as artificial intelligence and automation but noted that success depends on disciplined implementation. Kagia called for the development of future-ready organisations that balance innovation with accountability and measurable results, urging participants to prioritize critical actions and deliver tangible results.
