Kenya’s economic story is one of resilience and ambition, shaped by both promise and pressure. Across the country, households are navigating an increasingly complex financial landscape. Inflation is steadily eroding purchasing power and evolving tax policies have left many with less to save or invest. Traditional safety nets are under strain, revealing a growing vulnerability across income levels.
This reality reflects what experts call a “protection gap”, the space between the risks people faces and the safeguards available to them. That gap widens with every medical emergency, loss of employment or business disruption that leaves families scrambling for support. While informal support systems like chamas and extended families still play a role, they are no longer enough to withstand the scale and frequency of today’s risks.
Insurance offers a scalable solution. It provides the structure needed for financial resilience. It allows individuals and businesses to plan without fear, recover without delay, and invest in the future with confidence. Rather than grappling with the fallout of crises, insured households and businesses can move forward with stability and dignity.
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In well-insured economies, protection is the quiet enabler of progress. Insurance is a platform for continuity, ensuring that health shocks do not derail education plans. It helps entrepreneurs bounce back after a fire or theft, and supports breadwinners in safeguarding their dependents, even in their absence.
The conversation around financial security in Kenya must shift from reactive crisis management to proactive wealth protection. As economic pressures mount, insurance is no longer a luxury or an optional expense; it is a fundamental infrastructure for sustainable prosperity.
Kenya’s youthful, increasingly digital population presents a tremendous opportunity to embed insurance into everyday financial life. Many young people already use mobile money and short-term lending platforms. Bundling health, asset, and life coverage into these services can normalise protection from a young age, cultivating lasting financial habits that improve outcomes across lifetimes.
Early adoption brings tangible benefits. Young adults who start early enjoying lower premiums and broader coverage options. Just as important, they become stewards of financial literacy, encouraging their families and communities to think long-term and plan proactively.
There is also immense untapped potential in Kenya’s informal sector, which contributes over 80 per cent of employment. Historically underserved by insurers, this sector is now seeing change. Micro-insurance products, pay-as-you-go models are making insurance more relevant, and affordable. For a mama mboga or a boda boda rider, insurance tailored to daily income patterns can mean the difference between temporary setback and permanent loss.
Still, the data paints a sobering picture. Over 85 per cent of Kenyans rely on out-of-pocket payments for medical care, often draining savings and/or resorting to fundraising. Less than 10 per cent have life insurance, exposing millions to financial instability after loss of income. Many households fall into poverty following a serious illness, injury or death in the family.
For Kenya to make meaningful progress, we must embed insurance into the national economic agenda. That means simplifying products and positioning insurance as essential and not a luxury. It must become part of daily life, not an afterthought.
Ms Odhiambo isGroup Head of Distribution, Liberty Kenya
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By Judith Odhiambo