Statistics in the insurance sector indicates that more Kenyan’s are now willing to save for the future than before.
Industry figures indicate that there has been enormous appetite for a pension which has seen the industry total pension funds under guaranteed arrangement grow from Ksh163 billion to Ksh183.7 billion, a growth rate of 12.7 percent despite the heavy withdrawals during the same period which was as a result of mergers and acquisitions and closure of big stores like Nakumatt in 2018.
It is projected that pension under this class will grow to Ksh300 billion by 2020 with the supporting regulation which now requires the entire employer portion to be differed till retirement age or early retirement at 50 years.
According to Kenindia Assurance, the growth is attributed to public knowledge about the pensions sector as more Kenyan’s become increasingly enlightened on the need and benefits to save for the future as they seek for financial security at retirement.
For instance, Kenindia Assurance has seen its current corporate client base rise from 265 in December 2018 to the current 302. The personal pension plan arrangement has also experienced extensive growth in numbers having attracted 3,500 individuals so far up from 2,400 individuals within the same period.
“The past growth indicates an impressive future performance within the pensions sector and Kenindia Assurance continues to position itself as the Pension Manager of choice for the majority of Kenyans. We have been and intend to continue being part of the lives of our clients by ensuring growth of their investment in our nest and by protecting it against inflationary risks and also guaranteeing them of a regular income even after retiring from employment or business,” said Kenindia Assurance Head of Pension Business – Life Division Mr. Christopher Losialoi.
The pension’s outlook observes that, the social fabric in Kenya and in deed in Africa is changing rapidly, which has seen reliance on the traditional forms of old age support such as extended family and community support becoming extinct.
Urbanization, cancer and HIV/ AIDS have also increasingly stretched financial resources thereby leading to decreased reliance on informal family support systems as a means of keeping the elderly out of poverty. This has encouraged many Kenyans to seek alternatives to securing their future where pensions have provided a sure gate way.
Young pensioners are increasing by the day and are now going out of their way to enroll for individual programs which are running concurrently with those of their employers. This behavioral trend has seen the growth of registered individual pension schemes service providers to 34 as per the list in the retirement benefits authority.
Various changes have also been observed in the savings industry both positive and negative.
“We have noted an increase in stock market investments, ‘chama’ memberships, remittances from the diaspora as well as real estate development and though faced by the current interest rates controls, increased petroleum prices, rising inflation rate and the pressure on the Kenya shilling,” says Mr Christopher Losialoi Head of pension, Kenindia Assurance Kenya.