The number of bancassurance firms in Kenya fell 70 percent to eight in 2022 from 27 last year following regulatory reforms introduced in the sector, The Business Daily newspaper reported, citing the latest Insurance Regulatory Authority (IRA) data.

The sharp decline comes as the regulator introduced new rules in the sector requiring bancassurance companies to increase minimum capital to 5 million Kenyan shillings, which is higher than what is needed of brokers (1 million Kenyan shillings), and raised registration fees from 1,000 to 20,000 Kenyan shillings.

The bancassurance firms must also provide a 10 million Kenyan shillings bank guarantee or a government bond.

Moreover, lenders must own 100 percent of the bancassurance agents, obtain collaboration agreements with insurance companies and display the name of the underwriters in any advertising feature.

The regulator said some lenders have not complied with the new rules, so they have only published the eight fully compliant ones.

“It is linked to the regulatory changes. By last week we had about 19 firms in the process of compliance,” IRA CEO Godfrey Kiptum told the news daily.

(Editing by Seban Scaria