A recent survey showed a worrying trend where millions of Kenyans are pulling out of their insurance and investment portfolios. The survey showed that companies paid at least 10 billion shillings to those running away from investments.
Data from the Insurance Regulatory Authority (IRA) showed that the value of policy surrenders during the review period was nearly the same as the 10.45 billion shillings that were cashed out in a similar period in 2021. This was more than those opting in.
According to the data, customers seem to be pulling out of products such as life assurance, pension, and investment products which are usually long-term in nature. The product segments also require one to invest over a long time with minimum withdrawals.
Many that opted to pull out of their investment commitments were deposit administration which cashed out 4.59 billion shillings followed by 2.57 billion shillings from life assurance. Those in personal pension pulled out 1.98 billion shillings. 1.12 billion shillings were withdrawn from investments while 76 million shillings were from annuities.
Among those who paid the highest amounts as investors left was ICEA Lion Life which saw a whopping 5.89 billion shillings surrenders followed by Liberty Life which paid out a total of 2.13 billion shillings. Britam Life paid 1.39 billion shillings while Jubilee paid 385 million shillings. Old Mutual paid 278.8 million shillings.
Analysts have attributed the current trend of Kenyans pulling out of their long-term investments to hard economic times that have been brought about by the Covid-19 pandemic among other factors. During the peak of the pandemic, millions of Kenyans lost their jobs and had to depend on their savings for survival.
The trend also comes at a time President William Ruto has been criticizing the savings culture in Kenya, terming it the worst in the region. The Head of State has been at the forefront of pushing for more savings through NSSF.
Related Content: Old Mutual Awards Best Insurance Intermediary Of The Year