Bancassurance stakeholders are calling for urgent regulatory reforms to match the pace of innovation in the insurance industry, meet customers’ evolving needs, and unlock inclusive insurance growth.
Bancassurance Association of Kenya Chairperson and KCB Bancassurance Intermediary Managing Director Aggrey Mulumbi underscored the need for a progressive regulatory framework that accommodates a digital-first consumer base, diverse distribution models, and equitable treatment for all intermediaries.
“We have made considerable progress in deepening insurance penetration through bancassurance over the past two decades, but we must now take a step further. We need to relook the regulatory framework to reflect today’s realities, including digital first consumers, joint ventures, integrated financial ecosystems, and emerging platforms,” said Mulumbi told the 3rd Annual Bancassurance Association of Kenya conference held in Mombasa.
He emphasized the need for a more dynamic and inclusive regulatory approach, noting that outdated legislation continues to overlook the evolving roles of intermediaries such as SACCOs, fintechs, telcos, and app-based distributors.
Mulumbi called on the Insurance Regulatory Authority (IRA) and other stakeholders to co-create a sustainable, innovation-friendly framework that supports modern distribution models while ensuring consumer protection and market stability.
The new regulatory provisions, introduced as part of a broader reform agenda aimed at tightening compliance and enhancing transparency in insurance distribution, have triggered concern among commercial banks and insurance partners who argue the changes do not adequately reflect the operational realities of integrated financial services.
On his part, Old Mutual Group CEO, Arthur Oginga, said the opportunity for growth lies not in competition but in radical collaboration across banks, insurers, regulators, and technology providers.
“At 2.3% penetration, Kenya’s insurance market is underpenetrated, not oversaturated. This is an opportunity for innovation, for rethinking distribution, for deepening partnerships beyond transactional arrangements and into co-creation for real, sustainable impact. Let us collaborate not just to grow our market shares, but to expand the safety net for all Kenyans,” Oginga said.
The Old Mutual Group CEO urged players to co-create solutions to address emerging risks such as climate change, which has heightened exposure to natural disasters and economic vulnerability.
Oginga says insurers should move beyond traditional models and play a central role in helping customers adapt to a more volatile future.
The bancassurance model, which allows banks to distribute insurance products, has become a critical driver of insurance penetration across underserved and emerging markets.
Leveraging banks’ established networks and customer trust, the model has proven especially effective in advancing financial inclusion, particularly in rural and low-income segments.
“Kenya’s financial services sector, including insurers, banks, and policymakers, have a central role to play in helping Kenyans move from survival mode to building true, sustainable financial wellness. This calls on the industry to rethink how we design products, how to deliver services, and how we empower customers with the tools and advice they need to secure their future. Let us collaborate not just to grow the market shares, but to expand the financial safety net for all Kenyans,” said IRA Director Supervision Kalai Musee.
The stakeholders emphasized on the importance of implementing reforms in a manner that sustains current momentum rather than disrupting it.