This marked the fifth consecutive annual increase and put the indicator at its highest level since 2017 when it stood at 2.68 percent.

The sustained growth has been supported by life insurance, whose pace of growth has been above that of short-term covers over the past nine years. Between 2016 and 2025, life insurance premiums more than tripled to Sh236.29 billion, while general insurance premiums rose 1.85 times to Sh225.38 billion.

“The growth in life insurance has been driven by product innovation, increased financial awareness and literacy, growing trust through easier claims and maturity payments, government intervention particularly in the pension space, and a shift towards greater personal responsibility for retirement,” said Daniel Wang’endo, operations manager at Geminia Life Insurance.

He explained that life insurers last year, for instance, introduced or repackaged more than 40 products targeting changing customer needs and generational differences, boosting their relevance in the market.

Life insurance penetration rose to 1.35 percent in 2025 from 1.18 percent a year earlier, overtaking general insurance penetration, which increased marginally to 1.28 percent from 1.26 percent. 

Overall insurance penetration fell from the 2017 peak to 2.43 percent in 2018, 2.34 percent in 2019 and 2.17 percent in 2020 before beginning a sustained recovery.

The 2020 decline was partly linked to the rebasing of Kenya’s economy, which increased the size of GDP and thereby reduced insurance premiums as a proportion of economic output. Kenya has rebased its economy seven times, including in 1957, 1967, 1976, 1985, 2005, 2014 and 2020.

The latest rise in penetration coincided with a shift in the structure of the insurance market in favour of life business when it comes to premium income.

Life insurance premiums increased 23.2 percent to Sh236.29 billion in 2025 from Sh191.80 billion a year earlier. Over the same period, IRA data shows general insurance premiums grew 9.93 percent to Sh225.39 billion from Sh205.03 billion.

The two segments generated a combined Sh461.68 billion in premiums, with life business accounting for about 51.2 percent of the market. The ascent of life covers marks a key change in an industry that has traditionally been dominated by short-term covers such as motor and medical insurance.

The growth in life business has increasingly been driven by products linked to long-term savings, pensions and investment as households and employers seek ways of building financial security.

“The long-term nature of life insurance means there are more long-term funds available. If you start saving for a pension at 25 and access the money at 60, that is a 35-year period. It is money that you are not accessing in the meantime,” said Mr Wang’endo.

Life premiums grew 20.66 percent in 2023 and another 12.77 percent in 2024 before accelerating to 23.2 percent last year. General insurance, by comparison, grew 14.46 percent in 2023 and 8.08 percent in 2024, before recording 9.93 percent growth last year.

The trend has continued into the first quarter of this year, with long-term insurance premiums rising 36.3 percent to Sh72.87 billion as general covers grew 8.4 percent to Sh81.88 billion.

Deposit administration and investment-linked business were among the major drivers in the first quarter of 2026, with the IRA linking much of the deposit administration growth to the contracting out of tier II National Social Security Fund contributions.

The changing balance between life and general insurance could help deepen penetration further since life products are designed around longer-term savings and protection, giving insurers access to larger and more predictable pools of funds.