Kenya’s Motor Insurance Market to Hit $1.63 Billion by 2024

Kenya’s motor insurance sector is undergoing a significant transformation, driven by the cashless, paperless, and fast-paced lifestyle of modern motorists.

As the market is projected to hit a remarkable size of US$1.63 billion in gross written premiums by 2024, motor underwriters are investing heavily in product innovations to adapt to shifting consumer preferences.

Historically, motorists primarily opted for third-party insurance. However, the current landscape indicates a marked change, with an increasing number of customers seeking comprehensive risk management solutions. The new offerings not only cover vehicles but also provide a broader range of benefits and services.

Furthermore, the traditional sales models dominated by insurance agencies and brokerage firms are being reshaped by a digital revolution. The advent of mobile technology has ignited the development of platforms that facilitate the purchase of insurance products online, allowing consumers to access services anytime and anywhere.

This “digital migration” is largely fueled by Kenya’s tech-savvy population and the growing use of smartphones, which correlate with the country’s internet penetration rate of 32.7%, translating to approximately 17.86 million users.

According to the Communications Authority of Kenya, mobile device subscriptions reached 67 million in the last quarter of 2023, with a penetration rate of 127.5%. This digital landscape provides insurers with an exceptional opportunity to engage consumers continuously, regardless of time or day.

Earlier this year, CIC Insurance took a significant step forward in digitizing motor vehicle insurance with the launch of Easy Bima. The innovative product offers affordability and flexibility, allowing clients to spread the cost of comprehensive car insurance over 12 months. The market response has been enthusiastic, with peak transactions reaching 200 insurance purchases in a single day.

CIC’s Easy Bima exemplifies a customer-centric approach vital for navigating today’s challenging economic environment, where rising costs have strained disposable incomes. Customers can make an initial payment of just 20% of the total premium, with the remainder divided into 12 equal monthly installments, significantly easing the financial burden associated with motor insurance.

Kenyans can now protect their valuable assets without jeopardizing their financial stability. The Kenyan insurance sector is increasingly focusing on embracing technological innovations in both operational processes and customer engagement strategies.

In particular, telematics-based insurance is gaining traction, rewarding motorists for their safe driving habits with lower premium rates. These advancements showcase the industry’s commitment to enhancing affordability, accessibility, and seamless customer experiences, all while remaining competitive in an evolving market.