Over 130,000 Kenyans have dropped their insurance covers due to a sharp decline in disposable income, driven by rising taxes, levies, and the high cost of living.
A survey conducted by the Central Bank of Kenya (CBK), FSD Kenya, and the Kenya National Bureau of Statistics (KNBS) indicates that the number of Kenyans using insurance (excluding NHIF) fell from 1.99 million in 2021 to 1.77 million in 2024, further derailing efforts to increase insurance penetration in the country.
The report attributes the drop to financial strain on households, made worse by new statutory deductions such as the housing levy and mandatory healthcare contributions, which have cut workers’ take-home pay.
With wages failing to keep up with inflation and basic goods becoming more expensive, many Kenyans have removed private insurance from their budgets.
Now, 70.5% of Kenyan households lack any form of insurance, leaving them exposed to financial ruin in the event of illness, accidents, fires, or unexpected deaths.
The survey also found that those in formal employment make up the majority of insurance users at 660,000, followed by business owners (450,000), agricultural workers (260,000), dependents (240,000), and casual laborers (140,000).
Nairobi accounts for over 80% of gross direct insurance premiums, showing a major gap between urban and rural areas.
With insurance uptake falling, Kenya’s coverage remains at just 2.4% of GDP, far behind South Africa’s 11% and Namibia’s 7.8%, raising doubts about long-term economic resilience and financial inclusion.
