Local insurance companies will be among the
biggest winners this year as the government
moves to implement the mandatory local
underwriting for all imports.
The new law, which came into effect on January
1, requires imports to be covered locally.
Treasury Cabinet Secretary Henry Rotich on his
2016-17 June 8 budget speech directed the
Kenya Revenue Authority (KRA) to liaise with
other players to implement Section 20 of the
Insurance Act.
State Department on Shipping and Maritime
Affairs Principal Secretary Nancy Karigithu
warned that those who fail to comply will face
penalties. “Enforcement of Section 20 is a legal
requirement but we will walk together to ensure
a smooth transition,” Karigithu said.
Marine Cargo Insurance policy provides
indemnity against loss or damage for goods
being transported by sea or air, and incidental
land transportation.
Karigithu said cargo already en route to
Mombasa and existing contracts with foreign
firms will, however, not be affected until they
lapse. But any cargo shipped on or after January
1 must be covered.
The new law, she said, is part of the
government’s strategy to grow domestic
premiums by about Sh20 billion annually, create
jobs and grow the economy.
Insurance Regulatory Authority data shows local
gross premiums in 2014-15 were Sh2.7 billion
and Sh2.9 billion respectively. Kenya gives an
estimated Sh21 billion to foreign firms annually.
Karigithu said the new regulation will make it
easy for importers to make claims, as opposed
to the tedious procedure when lodging claims
from foreign underwriters.
“We are claiming our heritage. This will create
jobs and boost the country’s insurance sector,”
she said.
Industry players will use the Kenya TradeNet
System operated by KenTrade to facilitate the
online application of local marine covers.
Insurance firms have in the last one month been
putting in place systems to comply with the new
rule. Among them is giant ICEA Lion General
Insurance which has unveiled an online portal
and announced a cover capacity of up to Sh1.6
billion per single shipment.
“We have substantial technical and financial
capacity. Locally, we have the technical capacity
to produce a marine policy as good as any in the
international market,” ICEA Lion General
Insurance CEO Steven Oluoch said in an
interview.
Other insurance firms that have the cover
platforms include CIC, Madison, Jubilee, and
APA.
The Shippers Council of East Africa has tasked
insurance firms to install a 24-hour automated
system interlinked to government clearing
systems to facilitate the cover uptake.
@spear does this mean guys will start avoiding our port, watu wananungunika mbaya sana huku
mbona hawataki wenzao wakule?
I don’t see how it will drive business away. Let’s build and buy local as well.
Can sambarry expound on what type of cargo that’s supposed to be insured locally… Ama kwa kinaganaga ukipenda, magari yanayoagizwa nje yatahitaji kukatiwa bima humu nchini?
hawajui where the money is??? …ama they own the insurance companies???..I expected kama ni comprehensive and there is no claim for a whole year the insurance company to benefit from 50%, government 30%, mwenye gari 20%… lakini ni wizi tu.!!!..haina noma
maneno ya Insurance niliachana nayo and took a rather different path
We are still waiting for the system to go live.untill then Ata Mimi sijui the economic repercussions
Can imagine big government cartel involved. .serikali ya wai…