Businesses urged to strengthen risk management amid rising threats

KNA by John Brighton

Businesses and institutions have been urged to strengthen risk management strategies and review their insurance coverage as cybercrime, extreme weather events and supply chain disruptions pose growing threats to corporate operations.

Industry stakeholders made the call during a corporate risk management forum hosted by Liaison Group in Nairobi.

The forum brought together insurance professionals, regulators and industry players to explore strategies for protecting businesses against financial losses and ensuring continuity in an increasingly unpredictable operating environment.

Insurance Regulatory Authority (IRA) Chief Executive Officer and Commissioner of Insurance Godfrey Kiptum said effective regulation, consumer protection and public education remain critical to building confidence in the insurance industry.

In a speech delivered on his behalf by IRA Director of Supervision Kalai Musee, Kiptum revealed that Kenya’s insurance industry recorded gross direct premiums of Sh466.58 billion in 2025, representing a 16.5 per cent increase from the previous year.

Insurance penetration rose to 2.63 per cent of gross domestic product (GDP), the highest level since 2016, reflecting the sector’s growing contribution to the economy.

The industry also paid more than Sh227 billion in claims and policyholder benefits during the year, demonstrating its role in cushioning individuals and businesses against financial shocks.

 “The reason insurance companies exist is to pay claims,” Kiptum said, warning that delayed or unfair settlements could erode public confidence and damage the reputation of the entire sector.

He identified policy holder protection, market development, consumer education and public confidence as key priorities, while calling for innovative insurance products targeting small businesses and underserved communities through digital and mobile platforms.

Liaison Group General Manager for Risk and Insurance Brian Kiprop said the growth of the insurance industry must translate into meaningful protection for individuals, families and businesses.

“Behind every policy, every premium, all benefits and claims is a person, a family, an institution or a business with a value to protect,” Kiprop said.

Liaison Group General Manager for Regional Business Denis Karanja challenged organisations to look beyond simply purchasing insurance policies and establish whether their coverage adequately protects their assets, revenue and operations.

 “The question is no longer insurance, but what is the depth of the policies that we do have,” Karanja posed.

He said businesses needed to match their insurance cover to their actual exposure to risk, cautioning against reducing premiums or coverage costs without considering the potential consequences of major losses.

Peter Mugambi Muthuri, representing the Retirement Benefits Authority (RBA), highlighted the need for Kenyans to prepare financially for healthcare expenses after retirement.

Muthuri said assets held by Kenya’s retirement benefits industry had grown to Sh3.2 trillion by June 2026, up from Sh2.8 trillion in December 2025.

However, he noted that approximately 7.5 million people were covered by pension schemes, representing about 26 per cent of the population.

He explained that post-retirement medical fund regulations allow pension scheme members to set aside savings for future healthcare expenses while still in employment.