Initiatives intended to increase industry penetration include an improved regulatory framework, innovative products, adoption of alternative distribution channels, enhanced public education and use of technology.

Industry figures show that Kenya’s insurance industry grew by an impressive 18 percent in 2012 posting $1.28 billion in gross written premiums as compared to $1.08 billion registered in 2011. The main drivers of this growth remain the traditional motor, medical and fire insurance.

Despite the growth in revenue, the overall penetration of insurance increased from 3.02 to 3.16 percent meaning that most Kenyans are still locked out of insurance services. In 2012, short term (general insurance) took the largest chunk of the insurance market pie standing at 66 percent while long term (life insurance) stood at 34 percent.

Although Kenya suffers slow penetration, it is ranked fourth highest in Africa and better than Mexico, Russia and China. The report points to a possible leap in the local industry growth to about 20 percent in 2013.

In the 2012 report, AKI executive director, Tom Gichuhi attributed the slow growth in Kenya’s insurance to price undercutting and consumer apathy as a result of the poor image of the industry and fraud.

AKI Chairman, Mark Obuya said performance of the industry in 2012 was encouraging given that the first half of the year was characterized by sluggish economic activity.

Still, thanks to a resurgent agricultural industry coupled with an easing monetary policy and the onset of short rains in the second-half of 2012, economic activity in Kenya experienced a boost — rubbing off some of the gains on the insurance business.