Insurance brokers urged to restore public trust through transparency

Insurance industry stakeholders have been challenged to restore public confidence through greater transparency, ethical business practices, professional accountability, and improved service delivery.

The Association of Insurance Brokers of Kenya (AIBK) National Chairman, John Lagat, said trust remains the foundation of the insurance profession, arguing that the industry's true value should be measured not by the number of policies sold or premiums collected, but by the protection it delivers when customers need it most.

"A policy is a promise; a settled legitimate claim is the fulfilment of that promise," said Mr Lagat at the association's 20th Annual Regional Conference in Mombasa.

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The two-day conference brought together more than 700 delegates from across the East African Community (EAC), including Kenya, Uganda, Tanzania, Rwanda and Burundi, to discuss the industry's emerging challenges and opportunities.

He challenged brokers to reposition themselves as trusted advisers, risk management partners and advocates for policyholders, rather than merely intermediaries facilitating insurance transactions.

He noted that insurance brokers currently control approximately 35 per cent of Kenya's gross written premiums, describing this as both an opportunity and a challenge for the profession.

Mr Lagat urged brokers to expand insurance penetration among households, Small and Medium-sized Enterprises (SMEs), farmers and businesses while addressing underinsurance and improving public understanding of insurance products.

He said the profession needed to develop innovative solutions that respond to changing customer needs and make insurance more accessible and relevant to a wider section of the population.

"Our responsibility is not simply to leave behind a bigger insurance industry, but a better one: more inclusive, more resilient and more responsive to the needs of our customers," he said.

Nation Media Group Chief Executive Officer and Group Managing Director Geoffrey Odundo called for fundamental changes in how insurance companies communicate with customers, deliver value and enforce professional standards.

Mr Odundo identified transparency, fair value, professional conduct and accountability as four critical priorities for restoring public confidence and attracting a new generation of insurance consumers.

He said the continued use of complicated policy documents, excessive fine print and unclear exclusions had contributed to misunderstandings between insurers and policyholders, particularly when customers seek compensation.

He challenged insurance companies to simplify policy documents and communicate coverage terms in language that ordinary consumers can easily understand. He also warned that the industry risked losing younger consumers, particularly Gen Z and Alpha, unless it adapted its communication strategies and products to changing consumer preferences.

“Can we minimise the information overload we have? If you're going to attract the next customer, then ask yourself who's your next customer. The youth, isn't it? They don't have time, they're moving, and they consume things in ten seconds. So, are we going to be able to play in that space if we don't have transparency?,” he said.

He argued that younger generations increasingly prefer short, accessible and straightforward digital communication, requiring insurers to rethink how they present information and engage prospective customers.

He cited medical insurance policies where customers may purchase cover worth millions of shillings only to discover that particular benefits are subject to lower limits when they seek treatment.

He called for stronger professional discipline, warning that unethical behaviour by a few brokers and agents could undermine the reputation of the entire industry.

"A few individuals can destroy the image of the sector, so we need to have strong professional conduct. I think there's a need for having a regulatory mechanism and a consequence mechanism so that people who make the sector look bad are barred from practicing and that way you bring professionalism in the industry,” he added.

Insurance Commissioner and Insurance Regulatory Authority (IRA) Chief Executive Officer Godfrey Kiptum also raised concerns over fraudulent activities involving individuals posing as legitimate insurance brokers and agents.

Mr Kiptum said such practices were damaging public confidence and threatening the reputation of genuine industry players.

He cited cases in which individuals allegedly approached unsuspecting clients with promises of securing business opportunities before demanding substantial sums of money for insurance performance bonds.

“I have in the recent past seen a lot of fraud by a number of insurance brokers and agents, and what they do is they come and tell you to give us a performance bond; we have business, so they tell you to make a bid, then after two days they inform you, you have won the bid. We have many cases that are being investigated by the police,” said Mr Kiptum.

He also questioned why some players remained silent even when they were aware of fraudulent activities, warning that failure to report misconduct allowed unscrupulous individuals to continue operating.

The IRA boss also acknowledged efforts by the industry players in reporting suspected fraudulent activities to the regulator.

He urged brokers and agents to work closely with the IRA and law enforcement agencies to protect consumers and safeguard the integrity of the insurance market.

Held under the theme of "Perfect Vision: Building Trust, Inspiring Courage & Defining the Next Chapter," the conference brings together chief executives and managing directors of insurance companies, brokerage firms, regulators, policymakers, reinsurers, technology providers and other key players in the financial services sector.

The gathering comes at a time when the insurance industry is facing growing pressure to rebuild consumer confidence amid concerns over complicated policy documents, disputed claims, fraudulent intermediaries and inadequate understanding of insurance products.

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