Kenya’s largest telecom provider, Safaricom, has secured an insurance intermediary license from the Insurance Regulatory Authority (IRA), a move that will enable it to offer insurance products to its M-Pesa users under a new service named “Bima.”
This approval, following a four-year regulatory wait, was confirmed by CEO Peter Ndegwa during the company’s H1 2024 earnings call.
With “Bima,” Safaricom aims to leverage M-Pesa’s extensive reach—over 30 million active users transacting upwards of $11.6 billion monthly—to establish a robust presence in Kenya’s low-insurance penetration market, currently standing at just 3%. The new insurance offerings will be part of a broader financial service strategy that includes wealth management and savings products aimed at deepening M-Pesa’s role as a full-spectrum financial service provider.
“Innovation remains critical,” said Ndegwa. “We have revamped our wealth proposition and have now received an insurance intermediary license from the Insurance Regulatory Authority. This will help us accelerate our rollout of insurance solutions. We expect to launch propositions in both wealth and savings, as well as insurance, in the second half of this financial year.”
Since 2020, Safaricom has piloted various insurance products in anticipation of regulatory approval. With this new license, the telecom giant plans to offer savings and insurance products to its users more widely, making financial services accessible to millions in both urban and underserved rural areas.
The insurance product is part of a larger push to diversify M-Pesa’s offerings beyond mobile money into areas such as wealth management and savings. Safaricom’s entry into insurance also comes as the company faces pressure from Kenya’s Central Bank (CBK) to spin off M-Pesa into a separate entity, which could impact its telecom operations but also streamline its financial services focus.
In addition to the forthcoming “Bima” insurance service, M-Pesa has seen significant growth in its financial products, including a unit trust product, Mali, and savings accounts through partnerships with KCB Group and NCBA, alongside its popular overdraft service. In the first half of 2024 alone, M-Pesa accounted for 43% of Safaricom’s service revenue, achieving 16.6% year-on-year growth to $560 million.
According to the Communications Authority of Kenya, Safaricom commands an impressive 93.4% share of Kenya’s mobile money market, with Airtel Money holding the remaining 6.6%.
With its unparalleled reach and the new insurance license, Safaricom is poised to make a significant impact in Kenya’s financial services sector, offering Kenyans more options and expanding access to financial security across the country.
