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Insurers lobby to offer microinsurance policies without creating new subsidiaries
A previous study from Association of Kenya Insurers (AKI) showed demand has been strongest in health and funeral covers, as households seek protection from medical emergencies and the high cost of burial arrangements.
Insurance companies are seeking relaxed microinsurance rules to allow them to offer affordable, low-value covers without opening separate subsidiaries.
Through their lobby, Association of Kenya Insurers (AKI), the insurers have written to the Insurance Regulatory Authority (IRA) requesting changes to the Insurance (Microinsurance) Regulations, 2020 that require those intending to offer microinsurance business to set up separate microinsurance companies.
AKI's Manager for General Insurance Business William Kiama said in an interview with the NTV that scrapping the requirement would ease the burden on insurers, who currently must commit Sh50 million in capital to establish microinsurance firms despite already investing a minimum of Sh600 million in their general insurance companies.
“We have asked the regulator to look at the possibility of allowing our members to start doing microinsurance business using the general insurance business licenses,” said Mr Kiama.
“When the businesses for each member gains traction to a certain threshold, they can then be required to open separate companies. This will spare insurers from tying up too much capital in a relatively new area.”
An insurance policy qualifies as microinsurance if among other conditions, daily premiums do not exceed Sh40, sum assured is not more than Sh500,000 and the contract term is up to 12 months.
AKI is also asking the sector regulator to consider pegging the minimum premium and sum assured on some indexes such as minimum wage and inflation as opposed to having static figures in law.
Mr Kiama says the proposals are currently under consideration by the regulator and AKI hopes a tweak on the rules will encourage more insurers to start offering microinsurance.
He said in its current form, the 2020 regulations have “some hindrance” and this has seen the uptake not hit the figures the lobby had hoped for.
The innovative products, which mostly target the informal sector, have so far attracted six microinsurers —APA Microinsurance, Birdview Microinsurance, Britam Microinsurance Kenya, CIC Microinsurance, Star Discover Microinsurance and Turaco Microinsurance.
Mr Kiama says scrapping the rule on separate companies will attract more players already offering general insurance business.
IRA data shows microinsurers collected Sh1.06 billion premiums in the half year ended June 2025, highlighting the rising appetite for the affordable, low-value covers targeting underserved populations especially those in the informal economy.
The uptake of microinsurance products —mainly covering health, last expense, agriculture and small business risks— has surged, driven by increased awareness and distribution through digital platforms.
A previous study from AKI showed demand has been strongest in health and funeral covers, as households seek protection from medical emergencies and the high cost of burial arrangements.
Agriculture insurance has also recorded growth, supported by government and donor-backed premium subsidies targeting smallholder farmers vulnerable to the rising frequency and intensity of climate risks such as drought and floods.
