NAIROBI, September 8 – Local companies will now be able to get insurance cover against damages resulting from political risks, sabotage and terrorism.
This follows the signing of an agreement on Monday between UAP Insurance Company and the African Trade Insurance Agency (ATI) which would see the company’s capacity to cover the risks enhanced.
UAP Managing Director James Muguiyi said that the product was in response to demands exhibited by companies following the losses they incurred during the post-election violence.
“The partnership with ATI will enable us offer political violence as a rider to our property and motor vehicle insurance policies,” said Muguiyi.
He said they would provide the cover for both personal clients and companies up to the sum insured.
Many insurance policies in Kenya exclude the political risk clause.
ATI is a multilateral investment and credit risk insurance agency whose key role is to encourage investments and trade among its members through its risk management activities.
Currently nine African states including Kenya, Burundi, Malawi, Rwanda and Zambia own 99.5 percent of ATI’s shares with the remainder held by a number of African organisations.
UAP will provide the cover to its clients at their own premium rates where they assume the first aggregate loss while ATI would cover the excess.
“It will be based on a rate on the total sum insured. We will pay up to 100 percent up to the sum insured,” the MD explained.
ATI Chief Executive Peter Jones told Capital Business that by reinsuring UAP, the agency would facilitate the provision of insurance, co-insurance and reinsurance services which would also have a positive impact on the entire financial sector.
Banks for example have been reluctant to lend beyond five years because of the election cycle.
“As soon as they have insurance that protects them or the insured, they are able to lend for longer periods,” Jones added.
He said the product, which is only available in South Africa, is a significant development for the insurance industry in the country.
ATI, which is headquartered in Nairobi was supported in this agreement by Africa Re and East Africa Reinsurance Company (Zep Re) and Underwriters from Lloyd’s of London.