struggle with agent disengagement, making it harder to reach underserved communities consistently. By understanding these behavioral drivers, insurers can design products, communication strategies, incentives, and customer journeys that encourage lasting participation and build a stronger culture of financial protection.
Recognizing that insurance decisions are shaped by human behavior, organizations such as Busara have developed the Behavioral Diagnostics Toolkit for inclusive insurance to help insurers design solutions that reflect how people actually make decisions. The toolkit provides a practical framework for product developers to identify why customers and distributors behave the way they do before introducing new products or improving existing ones. Instead of relying on assumptions, it combines behavioral science with customer insights, administrative data, and customer journey mapping to uncover the barriers that influence enrollment, renewal, and claims decisions. This evidence-based approach enables insurers to address the real reasons people hesitate to purchase or maintain insurance cover.
Consider a small business owner whose shop represents years of savings and hard work but remains vulnerable to fire, burglary, or other unexpected losses. Without adequate protection, a single incident can erase years of investment and threaten the owner ' s livelihood. Products such as Biashara Salama are designed to protect both customers and financial institutions by providing financial support in the event of death or permanent disability, reducing the economic impact of unforeseen events. When behavioral insights are combined with affordable, well-designed products, insurers can build solutions that are not only accessible but also trusted, relevant, and capable of strengthening financial resilience among underserved communities.
Microinsurance is expanding beyond traditional markets to reach people who have long been excluded from formal insurance, including boda boda riders, security guards, students, farmers, and members of informal savings groups. This shift recognizes that every Kenyan, regardless of occupation or income level, faces risks that deserve financial protection. The true value of microinsurance is not only its affordability but also the dignity it gives families by reducing the financial hardship caused by unexpected events. When a funeral does not force a family to sell its assets, when a hospital admission does not wipe out household savings, or when a farmer can recover after a loss, insurance becomes a pathway to resilience rather than a luxury.
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Access is also becoming easier through mobile technology, digital onboarding, and partnerships with SACCOs, cooperatives, and microfinance institutions that people already trust and use. These innovations are bringing insurance closer to communities instead of expecting communities to seek out insurance.
For many households, healthcare costs remain one of the greatest financial risks, with a single hospital admission capable of pushing a family into debt. Affordable solutions such as CoopCare for cooperatives, microfinance institutions, and registered groups, together with Hospital Cash Plans, are helping families access healthcare while protecting their income during periods of hospitalization, demonstrating how inclusive insurance can strengthen both financial security and social well-being.
What should insurance providers focus on?
Why do two customers with the same income receive the same insurance product, yet only one keeps paying for it? The answer often lies not in the product itself but in human behavior. Many people allow their policies to lapse because of competing financial priorities, limited understanding, lack of trust, or simple mental shortcuts that influence everyday decisions. If insurers focus only on product features while ignoring these behavioral drivers, even well-designed products may fail to achieve high enrollment and renewal rates.
Behavioral diagnosis helps inclusive insurance organizations understand how customers think, decide, and act before designing products or interventions. These insights enable insurers to develop solutions that are more relevant, practical, and aligned with the realities of the communities they serve. They also improve communication, distribution strategies, customer engagement, and agent performance by addressing the real barriers to participation rather than assumed ones. In inclusive insurance, understanding behavior is not an optional research exercise; it is the foundation for designing products that people trust, use, and continue to value over time.
For many Kenyans, KSh 60 is easily spent on a smokie pasua or a quick snack without a second thought, yet the same amount can provide insurance that protects income and health. Products such as Tuunza Mapato, offered by Safaricom in partnership with Turaco, demonstrate that affordability alone is not enough. People must also understand the value of exchanging a small weekly payment for financial security. This is where behavioral diagnostics becomes essential, helping insurers uncover the beliefs, habits, emotions, and mental shortcuts that influence both customer and agent decisions.
By applying behavioral science, insurers can identify why some people enroll immediately while others hesitate, despite facing similar risks and costs. Behavioral insights also explain why some agents effectively communicate the benefits of insurance while others struggle to engage potential customers. To reduce administration costs, products like Tuunza Mapato are delivered entirely through digital channels, with registration, premium payments, and claims completed via USSD or mobile applications, making the experience fast, simple, and paperless.
Partnerships with chamas, SACCOs, and trade associations further lower premiums by pooling risk across large groups, but their success depends on understanding the behaviors that encourage trust, participation, and consistent renewals. When inclusive insurance organizations combine affordable products with behavioral diagnostics, they design solutions that people not only can afford, but also understand, trust, adopt, and continue using over time.
The decline in insurance uptake was highlighted in a joint survey by the Central Bank of Kenya( CBK), FSD Kenya, and the Kenya National Bureau of Statistics( KNBS). Unfortunately, nearly 70.5 % of Kenyan households still do not have any form of insurance, leaving them deeply exposed to financial ruin during emergencies.
While micro-products exist, the challenge is spreading awareness so casual laborers, farmers, and boda-boda riders know this protection is an accessible safety net rather than a luxury. This highlights why it is critical for behavioral diagnostics to be embedded into the design, distribution, and communication of microinsurance products to ensure they address the real barriers that prevent casual laborers, farmers, and boda boda riders from enrolling and renewing their cover.
The future of inclusive insurance depends not only on creating affordable products but also on using behavioral insights to build awareness, strengthen trust, and make microinsurance an accessible safety net rather than a luxury.
Christine Nyandat is a seasoned insurance professional. You can commune with her on this or related issues via mail on: Nyandatc @ yahoo. com.