Liberty Life Assurance in Kenya faces challenges generating returns on its guaranteed fund, a key product for retirement savings.
The company’s managing director, Nkoregamba Mwebesa, announced a 0% return for the 2023 fiscal year due to a combination of factors.
Mwebesa cites the Kenyan equities market’s underperformance in 2023 and rising yields on government bonds, leading to losses.
“We wish to advise that the Board of Liberty Life Assurance recently met and reviewed the company’s financial performance for 2023. Consequently, the final rate of return for the guaranteed pension fund portfolio is 0 per cent,” Mwebesa said.
As a result, to address investor concerns and adapt to economic conditions, Liberty Life is offering a guaranteed 9% return from 2024 to 2028. This aims to provide a buffer and help the fund recover.
Despite Liberty Life’s specific challenges, the Retirement Benefits Authority (RBA) reported an 8.09% increase in assets under management in the first half of 2023, reaching Sh1.7 trillion. This follows a 12.44% increase in 2022.
The RBA also observed a trend towards more stable assets like fixed deposits, which rose by 60.25% in 2023. This reflects a preference for lower-risk investments due to global economic uncertainty.
Liberty Kenya is listed on the Nairobi Securities Exchange in the insurance sector. It is the holding company for Heritage Insurance Company Kenya Ltd and Liberty Life Assurance Kenya Ltd. The insurance firm is a Liberty Holdings subsidiary and part of the Standard Bank Group.
