Jevans Nyabiage
15 September 2008
Nairobi — Pan Africa Life Assurance Limited has joined the annuity market in the wake of the growing competition in the insurance industry.
The company, a subsidiary of Pan Africa Insurance Holdings Limited which listed on the stock exchange and is part of Sanlam Group, on Monday launched an annuity product, FlexiAnnuity.
An annuity is a periodic payment of income in retirement after the beneficiary--annuitant--buys it (annuity) with an insurance firm.
Under FlexiAnnuity, the annuitant is allowed to purchase an annuity package of not less than Sh500,000, which provides regular monthly payments for the entire life.
The general manager of Corporate Business, James Muiruri said that the product is a single premium life annuity payable to the retirees for the rest of their life.
"Our clients have options of escalation payments of three per cent, five per cent and seven per cent depending on the investment on which the annuity is put in," said Mr Muiruri.
He said that if the annuitant dies before payments for the package starts, 95 per cent of the purchase value is paid.
Mr Muiruri said that at the age of 65, the annuitant is exempted from tax.
Tom Gitogo, the CEO, said that the Government has in the last few years made some positive legislative changes that will undoubtedly spur growth in the pension industry.
"Our launch of the FlexiAnnuity is an acknowledgement of this fact," Mr Gitogo said.
According to the chief executive, the company has embarked on an expansion of its footprint in an effort to provide the business with the additional leverage required for the business growth.
"We intend to pursue product innovation, as well as business and market diversification," said Mr Gitogo
Pan Africa Insurance Holdings recently announced its 2008 half-year results in which profit after tax increased to Sh236 million. The overall half-year gross premium income was up by 20 per cent and exceeded the Sh1 billion mark to reach Sh1.1 billion.
Mortality (death) tables were developed by the British over 60 years ago and have not been reviewed since then, said Mr Gitogo and added that work is in progress to prepare new ones.
The tables, a guide to help in calculating premiums for life assurance are in the last stages of reconstruction in line with the changing industry needs by the industry regulator, Association of Kenya Insurers.
The association is to hold a deliberative meeting to discuss on the issue in November this year.
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