Home News Insurance News Insurance policy cancellations rise to Sh10b as tough times bite

Insurance policy cancellations rise to Sh10b as tough times bite

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Insurance payments to customers abandoning policies hit Sh10.45 billion in the nine months to September last year on coronavirus-induced economic hardships.

The latest data from the Insurance Regulatory Authority (IRA) shows the value of policy surrenders increased from Sh7.64 billion in the preceding 2020 period, a pointer that customers are still struggling to keep up with premium payments.

The surrenders were largely in life assurance, pension and investment products, which are usually long-term. The data means surrenders have now risen for the third year running. Nine-month surrenders to September 2019 were Sh6.42 billion compared to Sh1.31 billion in a similar period in 2018.

They were fueled by salary cuts and job losses that have punctuated corporate Kenya due to Covid-19 disruptions, claiming nearly 740,000 jobs in 2020.Most of the insurance products are popular with salaried workers, meaning that disruptions such as job losses and wage cuts directly impacted the sustainability of insurance products.

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