UAP Holdings Group Managing Director Dominic Kiarie says the country is losing on opportunities to insure big infrastructure projects to multinationals.
He said Kenyan firms should be given first priority as they have the capacity to underwrite those projects locally before they are given to multinationals.
Construction of the Standard Gauge Railway for example covering 485km is estimated to cost Sh327 billion. Kenya will cover only 10 percent of this cost with Chinese Export-Import Bank financing 90 percent of the project.
The project is estimated to open opportunities for insurance covers in different capacities.
“With also the discovery of oil in the country there is so much room for growth for the sector, that’s why you see a lot of mergers and acquisitions in the industry in the recent past as companies gear themselves up for these new projects,” Kiarie added.
Early this year, Old Mutual Holdings Limited bought 60.6 percent stake in UAP Holdings.
Kiarie said the industry is in talks with the regulator to see the law put in place.
It’s important for Kenyan firms to be protected, this will see intermediaries get a chance to underwrite those premiums, everything should be outsourced locally before its given to multinationals,” said Bima Intermediaries Chairman Washington Ndegea.
Meanwhile, The Association of Kenya Insurers (AKI) says they have been in talks with Kenya Revenue Authority to introduce a clearance that would penalize importers who buy insurance from foreign firms.
Out of imports of Sh1.6 trillion worth of goods in 2014, it is estimated that about Sh21 billion s paid out annually to foreign insurers.
According to Intergovernmental Standing Committee on Shipping (ISCOS), East Africa paid out over Sh421 billion in insurance premiums between 2008 and 2012.
The money was paid by shippers (exporters and importers) in Kenya, Tanzania, Uganda and Zambia.