Life insurers registered a sharp rise in premium income in the first quarter of 2026, lifted by a surge in National Social Security Fund (NSSF) savings channelled through insurance products.

According to the Insurance Regulatory Authority (IRA), gross premium income under long-term insurance business rose by 36.3 percent to Sh72.87 billion in the three months to March, up from Sh53.44 billion in a similar period last year.

The growth was largely driven by deposit administration and investment-linked business, reflecting increased retirement savings and improved uptake of structured long-term products.

Deposit administration is a plan administered by a life insurance company where pension funds accumulate in a master group annuity policy until a participant retires.

Deposit administration, which includes schemes such as contracted-out tier II NSSF contributions, accounting for 29.7 percent of premiums. Life assurance followed at 19.7 percent, underlining the continued dominance of traditional savings and protection products.

IRA data shows that deposit administration and investments contributed 63 percent of the overall growth in long-term business, highlighting their outsized role in shaping industry performance. The investments class recorded the fastest expansion, growing by Sh7.05 billion, while deposit administration rose by Sh5.19 billion.

The performance in investments was largely attributed to APA Life Assurance and Britam Life Assurance, which accounted for 65.9 percent of the increase. The two firms posted premium growth of Sh2.53 billion and Sh2.12 billion respectively, pointing to aggressive accumulation of funds under investment-linked policies.

Deposit administration growth was heavily concentrated among Kenindia Assurance Company and Pioneer Assurance Company, which contributed 97.8 percent of the increase. Their premiums grew by Sh2.87 billion and Sh2.21 billion, respectively.

The IRA links the expansion of the deposit administration segment primarily to the contracting out of tier II NSSF contributions, which are managed under deposit administration schemes by insurers.

Under the NSSF Act, 2013, tier II contributions are set at six percent of pensionable earnings between the lower limit of Sh9,000 and the upper limit of Sh108,000, translating to a maximum monthly contribution of Sh5,940 each from the employer and employee in 2026.

The mechanism allows employers and workers to channel part of statutory retirement savings into privately managed schemes, boosting inflows to life insurers.

Other long-term insurance segments also recorded notable gains. Personal pension business grew by 29 percent to Sh6.51 billion, while group life rose by 21.7 percent to Sh8.72 billion, reflecting sustained demand for employer-sponsored benefits.

However, group credit business fell by 7.7 percent to Sh5.12 billion, mirroring subdued lending, while annuities dipped by 6.1 percent to Sh5.33 billion, suggesting caution among retirees.

The latest data shows how NSSF reforms are reshaping life insurance, with insurers positioning themselves as key managers of long-term savings.

Life insurers with strong distribution in pension-linked products and investment solutions are emerging as the biggest beneficiaries, potentially widening the gap in market share within the life insurance segment.

IRA data shows market concentration in life insurance remained high, with a handful of companies tightening their grip.

Britam Life Assurance retained the lead with a 20.1 percent market share, followed by ICEA Lion at 15.7 percent and Jubilee Life at 11.5 percent.

APA Life posted notable gains, nearly doubling its share to 7.7 percent, reflecting strong growth in investment-linked business.

Kenindia also expanded its footprint to six percent from 3.6 percent, boosted by deposit administration inflows.

Overall, seven insurers – Britam Life, ICEA Lion Life, Jubilee Life, APA Life, CIC Life, Kenindia Assurance and Absa Life – accounted for 73.1 percent of premiums, leaving the rest of the 15 life insurers with a market share of 26.9 percent.

The insurers’ market share is measured by the amount of gross premium income underwritten in comparison with the industry total premiums.

The 36.3 percent growth in gross written income for life insurers was faster than in general insurance, where premiums rose by 8.4 percent to Sh81.88 billion from Sh72.86 billion.

In the first quarter, general insurance was ahead of life insurance in terms of premiums. However, in the full year ended December last year, life insurance had overtaken short-term covers for the first time ever, signalling Kenyans' increasing attention to long-term financial planning products.

→ palushula@ke.nationmedia.com

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