“Innovation Without Protection is a Threat”: Insurance Sector Warned Amid FATF Grey List Concerns

Kenya’s insurance industry has been urged to tighten cybersecurity measures as the country pushes to leave the Financial Action Task Force (FATF) grey list. The call comes at a time when the sector is rapidly shifting to digital platforms.

Speaking at the 19th Annual Conference of the Association of Insurance Brokers of Kenya (AIBK) in Mombasa, Senior Counsel Mohammed Nyaoga said technology is transforming insurance. However, he warned that the same technology is opening new doors for cybercrime, fraud, money laundering and terrorism financing.

“Trust grows when systems are safe,” he said. He noted that customers will only embrace digital insurance if platforms are secure.

Nyaoga said more than 70% of Kenyan insurers now offer mobile apps, online portals and automated support. These tools make insurance faster and easier. They also reduce paperwork and operational costs. However, he said criminals are targeting these systems because they hold sensitive financial and personal data.

He noted that Artificial Intelligence and Machine Learning are reshaping underwriting, risk evaluation and fraud detection. He added that new insurance models are emerging, including micro-insurance and telemedicine coverage. These products allow more people to access insurance through simple, low-cost payments.

Even so, he urged insurers to prepare their teams for digital-age risks. He said boards, managers, and staff must understand cybersecurity and compliance. “Innovation without protection is a threat,” he emphasized.

AIBK Chairman John Lagat said the industry is in a period of change. Customer expectations are rising. Technology is accelerating. Global and local risks are shifting. He said some insurers are adapting well by using data analytics and new distribution models. These strategies are improving product design and expanding access.

However, he acknowledged that Kenya’s insurance penetration remains below 3%, while the global average is above 7%.

Insurance Regulatory Authority CEO Godfrey Kiptum reminded brokers that Kenya remains on the FATF grey list. He urged them to take responsibility in meeting anti-money laundering and security standards. “This is a national task,” he stressed. “We must act together.”