A significant and concerning trend is rapidly reshaping Kenya's motor insurance sector, according to a recent business survey covering the period from January to May 2025. The report reveals a striking abandonment of comprehensive insurance policies by a majority of Kenyan motorists, particularly private vehicle owners and operators. This shift, which builds upon a similar survey concluded in December 2024, signals a growing disillusionment with traditional, all-encompassing coverage and raises pertinent questions about the value proposition offered by insurers.
The numbers paint a stark picture: over the five-month period, the uptake of cheaper alternatives, such as Third Party Only (TPO) cover, surged by a sharp 37.8%. Conversely, comprehensive insurance policies recorded a significant 29.8% decline over the same timeframe. This stark contrast indicates a deliberate and widespread migration away from what was once considered the gold standard of vehicle protection.
The survey delves into the core reasons driving this pronounced shift, identifying a confluence of factors stemming primarily from the motorists' perspective. At the forefront is the high cost of comprehensive premiums, which many find increasingly burdensome in the current economic climate. Beyond affordability, significant challenges in the claims process emerge as a critical deterrent. Respondents cited pervasive frustration with what they described as "lengthy and bureaucratic compensation procedures," turning what should be a seamless experience into a significant source of aggravation.
Perhaps most tellingly, a widespread perception of poor value for money when no claims are made during the policy period is deeply influencing consumer choices. The report highlights that at least 67.3% of motorists view comprehensive insurance as a financial loss, particularly when they navigate an entire year without an incident. They perceive it, rather, as primarily a profit-making venture for insurers. This sentiment was eloquently captured by one respondent who posed a pertinent question: “If I go an entire year without being involved in an accident, why can’t I either claim back part of my unused premium or have it carried forward to the next policy year?” This common query reflects a fundamental desire for greater perceived fairness and flexibility in insurance products.
Adding to the growing distrust, many motorists pointed to a palpable lack of transparency in policy documents. The report notes, "some insurers failing to provide simplified explanations of coverage terms, often leaving policyholders stranded during the claims process." This opacity not only complicates the claims process but also erodes consumer confidence, pushing motorists towards self-reliance. Indeed, a growing number of vehicle owners now prefer to cover minor vehicle repair costs out-of-pocket, citing the delays, complications, and often unclear terms associated with formal insurance claims.
This significant shift represents a wake-up call for Kenya's insurance industry. The findings suggest that merely fulfilling the legal requirement for vehicle insurance is no longer sufficient to retain customers in comprehensive plans. Insurers are now faced with the urgent imperative to re-evaluate their product offerings, streamline their claims processes, and enhance transparency to rebuild trust and demonstrate tangible value.
