Mwalimu-G
Elder Lister
Insurance withdrawals hit Sh13 billion as economic struggles among Kenyans deepen
- By Maureen Kinyanjui
- 3 hours ago
Insurance customers in Kenya withdrew a record Sh13 billion in the year ending December 2023, marking the highest payout in two years.
The data from the Insurance Regulatory Authority (IRA) reveals a dramatic increase from Sh5.15 billion in 2022, a rise of 2.5 times.
This spike comes as many policyholders used their pension and investment savings to cope with the ongoing economic challenges.
The Sh13 billion in surrenders and withdrawals is the highest figure since 2021 when disruptions from the Covid-19 pandemic led to a cash-out of Sh17.12 billion.
Surrenders refer to completely abandoning insurance policies, such as education covers, and cashing out accumulated amounts. Withdrawals, on the other hand, involve partial cash-outs from products like unit-linked policies and pensions without fully ending the cover.
While withdrawals were the main contributor to the surge, rising 5.5 times to Sh10.23 billion from Sh1.85 billion in 2022, surrenders fell by 16 per cent to Sh2.78 billion, reaching a four-year low.
Many policyholders opted for withdrawals to avoid the penalties associated with abandoning their policies altogether.
The total claims, which include death benefits, maturity proceeds, and other annuities, as well as surrenders and withdrawals, reached Sh94.13 billion, a 14.6 per cent increase from Sh82.13 billion in 2022.
The IRA clarified that "claims include payments for death and maturity proceeds, while withdrawals relate to pension and some investment classes of business."
