Safaricom has been granted an insurance intermediary licence by the Insurance Regulatory Authority (IRA), officially paving the way for the company to introduce insurance services via its mobile money platform, M-Pesa.

This milestone, announced by CEO Peter Ndegwa during Safaricom’s half-year earnings report for 2024, brings an end to a four-year regulatory waiting period.

Safaricom’s new insurance product, branded as ‘Bima,’ marks a significant move in the company’s long-term vision to transform M-Pesa into a comprehensive financial service provider, catering directly to users’ “digital needs.”

Ndegwa elaborated on the company’s plans during Thursday’s earnings call, expressing a commitment to expanding M-Pesa’s offerings beyond traditional mobile money transactions.

“Innovation remains critical. We have revamped our wealth proposition and have now received an insurance intermediary licence from the Insurance Regulatory Authority,” Ndegwa stated, underscoring Safaricom’s ambition to broaden its financial portfolio.

“This will help us accelerate our rollout of insurance solutions, we expect to rollout propositions in both wealth and savings but also insurance in the second half of this financial year.”

Safaricom first began testing insurance solutions in 2020, hoping to bridge the gap in Kenya’s underdeveloped insurance market, which currently stands at a penetration rate of just 3 per cent.

With M-Pesa boasting over 30 million active users who transact more than $11.6 billion (Sh1.5 trillion) each month, Safaricom sees a substantial opportunity to leverage its platform’s popularity to capture a share of the insurance market, offering unit trust, savings, and insurance products to a vast customer base.

The firm’s push into the financial sector has, however, encountered regulatory challenges, particularly with the Central Bank of Kenya (CBK), which has suggested the need for Safaricom to separate its mobile money business from other operations.

Despite these regulatory hurdles, Safaricom remains determined to enhance M-Pesa’s role as a comprehensive financial tool, helping address Kenya’s low insurance coverage while offsetting declines in revenue from traditional call and text services.

With ‘Bima’ on the horizon, Safaricom looks set to redefine the landscape of digital financial services in Kenya, offering its customers access to a broader range of wealth management options.