Insurance Reimagined: How AI is reshaping insurance industry beyond premiums

Today’s consumers—accustomed to the speed, convenience, and personalisation of digital platforms—expect insurance to function less like a rigid contract and more like a responsive, tailored service.

Recent industry data shows that more than 70 per cent of customers now expect insurance interactions to be as intuitive and seamless as an e-commerce checkout. As Gen Z emerges as a dominant consumer group, insurers are facing growing pressure to shift from processing transactions to building ongoing customer relationships.

Artificial Intelligence (AI) is central to this transition. Nearly 80 per cent of insurers are already deploying AI to refine pricing, streamline claims, and improve customer experience.

In practical terms, this has significantly shortened claims processing timelines—from weeks to, in some cases, hours or minutes. At the same time, insurers are using data analytics and behavioural insights to design products that reflect individual risk profiles, moving away from standardised, one-size-fits-all policies.

This shift is increasingly visible in Kenya’s insurance market. Firms such as First Assurance are introducing products that target specific customer segments rather than broad categories. These include tailored health covers that allow clients to select benefits based on need, and SME-focused packages designed to lower entry barriers for small businesses. 

Motor and travel insurance products are also being expanded to reflect more nuanced risk scenarios and customer lifestyles.

Industry players argue that this approach is no longer optional. “With numerous players in the market, insurance companies must differentiate themselves by providing customised solutions,” said First Assurance Marketing Manager Jesca Karegua, noting that personalisation is becoming a key driver of customer retention.

However, the transition is uneven. While access to data has improved, the ability to use it effectively remains limited. Industry research points to a significant “data gap”: although 81 percent of insurers have access to third-party or behavioural data, only 12 per cent have the advanced analytics capabilities required to translate that data into actionable insights. Legacy IT systems continue to constrain real-time integration, while concerns around data privacy and the transparency of AI-driven decisions are shaping customer trust.

Even so, the direction of travel is clear. Insurance is being redefined from a reactive service into a predictive, data-driven one—where value lies not just in paying claims, but in anticipating risk, adapting coverage, and delivering more relevant customer experiences.

In that context, personalisation is not simply a feature. It is becoming the core of how insurance is designed, priced, and delivered.