SanlamAllianz Kenya has announced a strategic push to reposition retirement income solutions in the country, unveiling its Income Drawdown (IDD) Fund as a flexible alternative to traditional annuities and a response to growing demand for post-retirement capital growth.
Backed by a capital adequacy ratio of 283 percent, the insurer is seeking to strengthen its foothold in the retirement segment by targeting what industry players describe as a structural shift from pure savings accumulation to income sustainability in retirement.
The move comes as Kenya’s pension industry increasingly turns attention to the decumulation phase, the period when retirees begin drawing income from accumulated savings, amid longer life expectancies and changing market dynamics.
From accumulation to decumulation
For decades, retirement planning in Kenya has focused primarily on accumulation, encouraging workers to build savings during their employment years. However, insurers and pension providers are now intensifying focus on how retirees access and manage those savings once they exit formal employment.
SanlamAllianz, which traces its annuity heritage to being among the earliest providers of annuities in Kenya, says the Income Drawdown Fund represents a modern evolution of retirement income planning.
Jacqueline Karasha, CEO of SanlamAllianz Life Insurance, said the fund is designed to provide retirees with income flexibility while preserving the potential for capital growth.
“Retirement doesn’t mean lacking a steady flow of income,” Karasha said. “With the SanlamAllianz Income Drawdown Fund, your savings continue to grow even as you receive regular income, monthly, quarterly, or annually. It is flexible, reliable, and designed to make your retirement years truly rewarding.”
Unlike traditional annuities, which typically convert retirement savings into a fixed stream of income, the Income Drawdown model allows retirees to keep their funds invested while making periodic withdrawals.
How the Income Drawdown Fund works
The IDD Fund operates in a structure comparable to an invested pension account. Retirees withdraw regular instalments while the remaining balance continues to earn returns through market-linked investments.
Funds are invested within the SanlamAllianz Deposit Administration Fund, with the insurer reporting a net return of 15 percent in 2024.
In addition to targeting competitive returns, the product incorporates a capital protection feature, offering a minimum guaranteed return of 5 percent. The insurer says this safeguard ensures that the investment value does not fall below the principal amount, even in volatile market conditions.
Members are permitted to select payout frequencies, monthly, quarterly, or annually, and may revise withdrawal terms each year, subject to a cap of 12 percent of the fund balance per annum, in line with guidelines issued by the Retirement Benefits Authority.
The flexibility is designed to allow retirees to align income withdrawals with changing personal financial needs, including healthcare, lifestyle, or family obligations.
Tax incentives and regulatory alignment
The product also benefits from provisions under the Tax Laws Amendment Act 2024, which exempt monthly payouts and benefits from income tax. The insurer says this structure maximises disposable income for retirees compared to certain alternative withdrawal arrangements.
Tax efficiency has become a key differentiator in retirement products as policymakers seek to incentivise long-term savings while balancing fiscal considerations.
The IDD structure aligns with broader regulatory reforms in Kenya’s pension sector aimed at enhancing product transparency, protecting member interests, and expanding retirement coverage.
SanlamAllianz continues to manage an average monthly pension annuity payroll of approximately KSh 150 million, underscoring its established presence in the retirement income market even as it expands its product suite.
Addressing Kenya’s informal sector challenge
Beyond high-tier retirement solutions, SanlamAllianz is also targeting Kenya’s large informal sector, which accounts for an estimated 80 percent of the workforce and remains significantly under-covered by formal pension schemes.
Through its Akiba Plus digital platform, the insurer has introduced a mobile-first approach to retirement planning, allowing users to self-onboard, consolidate existing pension accounts, and monitor portfolio growth in real time.
The digital model is intended to lower barriers to entry, reduce paperwork, and improve access to professional pension management services.
Industry analysts note that digital distribution channels are increasingly critical in expanding retirement savings penetration, particularly among gig workers, small-scale traders, and self-employed professionals.
By integrating flexible drawdown options with digital onboarding capabilities, insurers are positioning themselves to capture growth opportunities in both formal and informal segments.
Competitive positioning in a consolidating market
SanlamAllianz Kenya was formed following the September 2023 joint venture between Sanlam and Allianz, creating one of the largest pan-African non-banking financial services entities.
The group operates among the top-tier insurers in several African markets and is pursuing growth through product innovation and capital strength.
The company’s 283 percent capital adequacy ratio provides regulatory headroom and risk absorption capacity, factors that may support expansion in long-term savings and retirement products.
Kenya’s retirement benefits sector has experienced steady asset growth over recent years, driven by mandatory contributions in the formal sector and increasing voluntary contributions.
However, industry participants acknowledge that innovation in decumulation products remains an area of significant opportunity.
As retirees seek income certainty, capital preservation, and inflation-beating returns, insurers are competing to provide structures that balance risk management with growth potential.
SanlamAllianz’s Income Drawdown Fund signals a strategic pivot toward flexible retirement income solutions, positioning the company to participate in what is expected to be a growing segment of Kenya’s pension market.
