Insurance companies have renewed calls for changes to microinsurance regulations, saying current rules that require them to establish separate subsidiaries are discouraging many from entering the market for low-value, affordable insurance products.
The Association of Kenya Insurers (AKI) has formally petitioned the Insurance Regulatory Authority (IRA) to revise the Insurance (Microinsurance) Regulations, 2020.
The regulations compel any company seeking to provide microinsurance services to set up a distinct microinsurance firm, a requirement the industry says is financially demanding and unnecessary.
AKI’s manager for general insurance business, William Kiama, said the additional capital required has created a barrier, even for established insurers.
He noted that companies already spend a minimum of Sh600 million to run their general insurance operations, but must commit an extra Sh50 million to start a microinsurance subsidiary.
“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 Kiama.
He explained that companies could be allowed to offer the products under their existing licenses at first, and then establish separate microinsurance companies once the businesses reach a certain level.
“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,” he said.
Microinsurance products are designed to provide low-cost coverage, with daily premiums capped at Sh40, maximum benefits set at Sh500,000, and contract terms limited to 12 months.
AKI is proposing that the law be revised to link these thresholds to indicators such as inflation and minimum wage instead of leaving them fixed.
Kiama said IRA is currently reviewing the proposals and expressed optimism that adjustments would encourage more companies to enter the market. He added that some of the existing regulations have acted as a “hindrance,” resulting in slower growth than expected.
Six companies are currently licensed as microinsurers: APA Microinsurance, Birdview Microinsurance, Britam Microinsurance Kenya, CIC Microinsurance, Star Discover Microinsurance and Turaco Microinsurance.
IRA figures show that microinsurers collected Sh1.06 billion in premiums in the six months to June 2025. This underscores the growing interest in products that serve low-income and informal sector populations.
Most policies cover health, funeral costs, agriculture and small businesses, and their popularity has grown through mobile platforms and increased public awareness.
AKI research shows that health and funeral policies have seen the highest demand, reflecting the need for affordable protection against medical emergencies and the rising cost of burials.
Agriculture insurance has also grown due to premium subsidies from government and development partners targeting smallholder farmers exposed to droughts, floods and other climate risks.
Kiama said removing the requirement to create separate companies would encourage more insurers to venture into microinsurance and broaden coverage for underserved communities.