Cannon Assurance Managing Director Maina Mukoma said on Thursday that despite the notable rise in terrorism and political violence risks, many Kenyans still do not value the importance of insuring against such threats.
“As industry players, we have realised that the uptake rate for the available products is quite low probably due to the lack of serious appreciation of the risk,” Mukoma explained.
In addition, he attributed the situation to the inability of many underwriters to provide political insurance as a stand-alone cover, given that policies in the market are often offered as a value-add.
Many insurance firms have since 2008 been developing insurance products that can protect companies from incurring the damages and losses that were witnessed in the country during the 2007/2008 post election chaos.
While several firms rushed to take up the covers to mitigate the impact of such violence on their businesses in the future, the enthusiasm has over the years waned. Mukoma however points to the renewed terrorist threats posed by Somalia’s Al Shabaab militants as one that should get Kenyans to consider insuring their property.
“The threats have not been empty and we have seen businesses and livelihoods being affected,” he said while also pointing out that 2012 being an electioneering year also brings with it political violence risks.
But while acknowledging that the government has played its part in enhancing security, the MD pointed out that it was the responsibility of the business community to ensure their own safety too.
“As much as we hold the government accountable for the country’s security, we do believe that the private sector has a role in providing protection against losses related to terrorism, sabotage and politically instigate events that may cause loss of life and property,” he contended.
Cannon Assurance, he said, was taking up its own challenge by launching the first stand-alone political cover in the market which insures against acts of terrorism, strikes, riots, malicious damage among others.
“This cover, which is projected to have 2.5 percent contribution to the business turnover will provide cover for buildings, motor vehicles, goods in transit, stocks, machinery and equipment,” the MD said of the cover dubbed ‘Linda Mali’ that targets property owners, business people, home and vehicle owners.
It has the reinsurance backing of Lloyds of London and Kenya Reinsurance Corporation.
The unveiling of this product was part of the firm’s contribution to insurance penetration that at three percent is still negligible. They also hope that together with other planned expansion initiatives, Cannon Assurance will be able to capture a bigger share of the market.
“This year, we have plans to open a minimum of two new branches in various towns to increase our branch network from the current five,” he disclosed.
The firm was established in 1964 as a branch office of International Life Insurance Company and started transacting general insurance in 1984 when Cannon UK sold its entire shareholding to local interests.
Currently, the insurer’s total assets are in excess of Sh4 billion and posts a premium income of Sh1.4billion annually.