Insurance agents are staring at a bleak future as technology continues to engulf their evolving industry.
Underwriters are continually coming up with new technology-driven platforms that are allowing them to interact directly with clients; cutting out the agents.
The recent trend of insurance companies coming up with applications that have embedded micro-insurance products, while still early to tell, could be the latest signs that insurance agents may need to re-invent.
These products while providing clients with direct contact with insurance firms, also have their language simplified with the aid of technology and years of data analysis. This then provides clients with the option of buying the policy directly from the underwriter or choosing to rope in, if they want, an agent to facilitate the process.
CIC General Insurance Company is one such underwriter which recently unveiled Easy Bima, a motor vehicle insurance product that allows payments in installments. The platform has extended to medical, personal accident and sportsman insurance.
While CIC General Insurance Company Managing Director Fred Ruoro said the firm still regards their partners as key in their business, the Association of Kenya Professional Insurance Agents (AKPIA) chairperson Clifford Ochieng agrees that there is a need to re-invent for the future.
It is the same view held by Liz Maru, Head of Innovation Britam Microinsurance, who noted that agents and brokers are gradually transitioning to consultants. She told The Standard in an interview that despite the technological innovations, microinsurance in Kenya remains a high-touch business. As customer-underwriter interactions enabled by technology take shape, brokers and agents are transitioning from sales-focused roles to more consultative, service-oriented roles. “Instead of simply facilitating transactions, they are now key in providing personalised advice, helping customers understand product options, and guiding them through claims or complex processes,” she said. Ms Maru insisted that brokers and agents are also crucial in building trust, especially for first-time or low-income customers who may be unfamiliar with insurance.
This makes them a key cog in the growth of the sector.
“By focusing on education, support, and long-term relationship management, brokers and agents continue to play an essential role, even as technology streamlines direct interactions,” she said.
This premise is also what Clifford Ochieng, chair AKPIA shares insisting that insurance is a service and that agents will remain relevant even with reservations that in the future, they may need to reposition themselves in the industry.
He says the emerging tools or platforms are just enablers to ensure a seamless experience and are designed for easy to understand products.
“The complex ones are left for agents and any other intermediaries where personal touch plays a critical role which existing platforms cannot match,” he said. He however agrees that insurance agents may need to evolve in the future from just salespeople to consultants and advisors.
“They can also provide value by offering personalised advice, helping clients navigate complex product journeys, and addressing personalised and specific needs that automated systems may not fully address,” he points out. He adds, “ Developed countries like the US, European markets, and South Africa still have intermediaries, so Kenya is no different.” There are 13,914 insurance agents as of 2024 which is a slight drop from 14,614 in 2023.
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In 2022, there were 13,508 insurance agents and 210 brokers according to the Insurance Regulatory Authority (IRA).
These intermediaries command over 50 per cent of business in the sector.
In 2022, 56.6 per cent of total industry premiums was sourced through insurance agents and 31.8 per cent through brokers.
Only 11.6 per cent were through direct business. Prof James Njihia, Dean Faculty of Business and Management Sciences at the Univeristy of Nairobi, while speaking at the inaugural Kenya Re CEOs Summit cast a shadow of doubt on the future of brokers and agents.
“Will there be brokers after innovations?” he posed. “These intermediaries will disappear so if you are a broker, you better start re-inventing yourself.”
He said the insurance industry must pivot just like other sectors like banks and film. He opined that there is much talk in the country about IT and technology but the actual movement is not as much.
“Like the car insurance industry which we all pay somehow I still have to call my broker, he emails me that paper, I print it … it is very annoying. When I was studying in the UK a long time ago, I remember if your car details are already online, you pay online, the policy comes and you can also switch companies fast,” he said.
Even with an elaborate platform that has made customers interact with their products directly, Mr Ruoro, the CIC General Insurance Company managing director says agents and brokers are still key partners for the underwriter.
He says the platform is meant to offer convenience noting that it also allows details of the insurance agent to be included during purchase.
Mr Ruoro says there are incidents when the purchase of the product needs to be expedited hence the existence of the platform.
“Sometimes the buying process (using the traditional way) is overtaken by other issues like speed. If you are clearing a vacuole from Mombasa, you need insurance right now. You do not need to know a lot of details. Here you are able to log in and see,” he said.
Additionally, the platform offers data protection, for products such as medical insurance, compared to having paper work being handled intermediaries.
However, the key advantage of the product comes with costs as microinsurance offers instalment payments.
“The customer does not have to go to the bank to borrow. Banks have made a big business selling premium loans to customers,” he said.
