Kenya: Life assurance premiums up 21pc
The uptake of life assurance cover increased by 21.2 percent in the six months to June, buoyed by households seeking financial security after last year’s economic turmoil triggered by the Covid-19 pandemic.
Gross premium income received by insurers under the life assurance class increased by 21.2 percent representing Sh2.93 billion to Sh16.74 billion in the half-year period to June.
The premiums were recorded at Sh13.81 billion in the same period last year and Sh13.04 billion in gross premiums in half period in 2019, according to data from Insurance Regulatory Authority (IRA).
Life assurance is among the biggest contributor of long-term business after pensions contributing 28.5 percent and 36.9 percent respectively.
Life assurance policies are meant to protect an individual’s household in case of loss of income, critical illness, disability, or demise.
The jump followed when last year individuals suffered a financial shift from a pandemic that also rendered most unemployed on the onset of lockdown measures.
This year’s ongoing recovery, muted hiring, and freeze in layoffs compared to last year’s hit, have seen most households turn to the policy to provide financial cushion and support their children’s education in case of uncertainty.
The growth in the policy follows after a rise in withdrawals and surrenders majorly in life assurance and pension products recorded in 2020.
Data from the IRA had shown that policy surrenders rose by 26 percent to Sh5.33 billion in six months to June 2020, from Sh4.22 billion posted in the preceding similar period.
Surrenders were highest in the pension business where Sh3.55 billion was withdrawn.
This was followed by life assurance products (Sh997.94 million) and Sh775.78 million from investment products.
The latest report also showed premium income under the pension class increased by 17 percent to Sh21.65 billion.
The long-term insurance business, including group life, annuities and investment policies registered Sh58.66 billion total premium in the six months representing a growth of 22.6 percent from Sh47.86 billion last year and compared to a growth of 8.2 percent from 2019.
Despite the high premium, the penetration of life insurance still lags compared to general insurance.