Calls for reforms in Kenya's insurance and pensions sector

Financial services firm Zamara has called for innovative solutions to bridge the widening social divide.

Speaking during the firm’s 30th anniversary celebrations in Nairobi, industry leaders emphasized the urgent need for reforms, particularly in insurance costs and retirement regulations.

“In a continent where over 80 per cent of jobs are being created in the informal sector, we face a huge social divide that needs to be addressed,” stated Zamara chief executive Sundeep Raichura during an exclusive interview with KTN, Thursday.

Raichura criticised existing incentives such as tax exemptions on savings for failing to effectively reach the informal sector. “We need the ease of access to savings and transparency in the savings process. Meaningful incentives, like matching funds, can encourage people to start saving,” he noted.

Raichura warned that the continued inaction could have dire consequences for the informal sector, which employs about 85 per cent of the workforce. “If we don’t do something about this, we risk a scenario where millions in the informal sector drop off the workforce, exacerbating our social challenges.”

Zamara executive director James Olubayi said insurance market penetration remains low despite the growth in the number of insurance firms and the increase in product offerings.

He advocated for adequate regulation to grow the industry with proper governance structures in place.

“The challenges posed by the gig economy and the rise of the Gen Z workforce compel us to innovate products that cater specifically to these demographics,” he added.

Zamara general manager of medical broking Liza Nyaga said Kenya’s medical insurance landscape has changed with many new entrants.

“Coverage has expanded to include previously unavailable services. However, challenges remain, particularly for older individuals seeking affordable options,” she stated.