NAIROBI, Kenya, July 22 – High insurance costs as well as constrained profit margins have been blamed for low insurance uptake among retailers in Kenya.
Unlike big retailers who can afford insurance covers, Retail Trade Association of Kenya (RETRAK) CEO Wambui Mbarire told Capital FM that informal businesses cannot meet basic insurance requirements, such as operating from permanent structures or maintaining stock records, two critical components for claims processing.
Wambui, speaking during the Capital FM breakfast show, called for urgent dialogue with the Insurance Regulatory Authority (IRA) to address longstanding gaps in insurance coverage for the retail sector, especially for semi-formal and informal businesses.
“This is definitely a conversation we must have with IRA,” said Mbarire.
“Retailers are on the frontlines every time there’s unrest, and yet we are the least protected.”
“Retail is not a margin business; it’s a volume business. So, amongst all the things I need to do, including pay my rent, pay my staff, and pay insurance, something might give.”
The destruction of property and theft of stock during protests has exposed vulnerabilities among smaller traders.
She cited cases where not only goods but also entire cash containers were stolen.
In such situations, proving the value of lost inventory becomes nearly impossible, leaving many retailers unable to recover.
She called for more inclusive and tailored insurance solutions that reflect the realities of Kenya’s evolving retail landscape.
Insurance penetration in Kenya remains low, hovering around 2.3 percent to 2.4 percent of the Gross Domestic Product (GDP), significantly below the global average.
According to the IRA, several factors contribute to this low penetration, including a poor saving culture, low disposable income, and a negative perception of insurance among the population.
