TOUGH MEASURES

Tough times push more Kenyans to seek cheaper insurance

The rising taxation and the increasing cost of living, have led to a significant demand for lower premiums.

In Summary

• Initially touted as a segment for the rich, industry data show that an increasing number of low income Kenyans are now moving to secure their children education.

• Despite this growth, traditional norms and economic disparities still hinder the widespread adoption of education insurance.

School going children walking along Luthuli street as they head home for the first half term break on February 28, 2024
School going children walking along Luthuli street as they head home for the first half term break on February 28, 2024
Image: FILE

The ability to purchase insurance has emerged as a key player that is shaping the landscape of education insurance in the country even as the push to grow uptake faces hurdles.

In the face of competing interests, Insurance companies offering education policies have found themselves facing competing factors as they strive to meet the needs of their customers.

Recent economic changes such as rising taxation and the increasing cost of living, have led to a significant demand for lower premiums.

CIC Life Assurance, managing director for Meshak Miyogo says that customers are seeking affordable solutions without wanting to cancel their existing policies.

"We’ve seen customers who used to pay Sh30,000 per month now requesting a reduction in their premiums to maintain their coverage," said  Miyogo.

Initially touted as a segment for the rich, industry data show that an increasing number of low income Kenyans are now moving to secure their children education.

Miyogo says that CIC Life Assurance’s flagship product, Academia, reflects this trend.

He adds that premiums for Academia are now starting as low as Sh2,000 per month, making it accessible for a wider range of customers.

"From the age of 30, more people are investing in Academia, as securing their children’s education becomes a pressing reality for many Kenyans," noted Miyogo.

CIC says the education insurance sector has seen notable growth, with a 30 percent year-on-year increase in policy uptake from its records. With education policies currently contributing 10 percent to CIC Group's revenue.

Miyogo adds that this positive trend is echoed across the industry, indicating robust growth for most life insurance firms.

Despite this growth, traditional norms and economic disparities still hinder the widespread adoption of education insurance.

While urban areas show higher uptake due to better access to information and education, rural areas lag behind.

Additionally, low-income earners often secure insurance only for secondary education, while those with higher purchasing power focus on tertiary and university education.

“Depending on the ability of parents I have seen parents with higher purchasing ability are focusing more on the tertiary education and university while those with less ability will focus more on education tor secondary where they are paying about Sh3000-4000 a month” said added the CEO.

Declining public education quality in the country, is driving many parents in urban areas resort to expensive private schools, contributing to a 5.7 percent increase in private tuition costs according to the Kenya National Bureau of Statistics.

He notes that given these challenges, education insurance policies provide a crucial solution by offering long-term financial support for children’s education.

These policies give parents peace of mind, ensuring their children’s educational future is secure regardless of economic fluctuations.

When considering an education insurance policy, a common concern is the possibility of recovering funds if one can no longer afford the premiums.

Miyogo emphasizes that planning for school fees through education insurance is increasingly seen as a necessity.

"With the ever-increasing costs of children's education, an education policy provides parents with peace of mind, ensuring their children's education is secure no matter what the future holds," he said.

As economic pressures mount, the demand for affordable education insurance in Kenya is growing. Insurance companies are responding by offering flexible and lower-premium options, ensuring that more families can safeguard their children's educational futures.


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