NAIROBI, Kenya, Oct 11 – Local importers and logistics firms can now insure their cargo faster and from anywhere following the launch of an online marine insurance portal by Kenya Orient Insurance Limited.
The move is aimed at easing access to marine insurance, often seen as complex and expensive, yet is vital in reducing risk of loss or damage to goods while in transit by sea or air. It will take as little as six minutes to get a marine insurance certificate using the portal accessible on www.korient.co.ke
Speaking at the launch ceremony, Kenya Orient Managing Director, Muema Muindi, said the Orient Marine Cargo portal is aimed at providing an efficient platform for importers and logistics firms to manage cargo risks from point of origin to the final destination.
“In the increasingly complex supply chain of global trade, this product will ease the safety concerns of importers, manufacturers and logistics providers. We appreciate the importance of swift response and efficient service in providing marine insurance coverage, handling claims and complete financial protection for goods in transit,” said Muindi.
He added that increased investment in infrastructure and manufacturing coupled with Kenya’s rising status as a regional business hub has resulted in a surge in the value and volume of imports and exports. However, many local importers are exposed to financial loss as goods transported by sea are covered only up to the destination port.
“Typically, goods under existing FOB and CIF contracts are insured up to the point they arrive in the country. We have had cases of goods being lost, stolen or damaged before getting to the final local destination. Orient Marine Cargo takes care of that by securing the goods right up to the warehouse,” said Muindi.
In June, the government directed that all goods coming into the country must be insured locally. Marine insurance business in Kenya has hitherto been dominated by foreign underwriters who repatriate billions of shillings thus denying the local insurance industry valuable revenue.
The Chairman of the Kenya National Chamber of Commerce, Kiprono Kittony, who was the chief guest at the launch, hailed the move by Kenya Orient and urged local firms to take up marine insurance.
“Local businesses still face a number of challenges not only in accessing foreign markets but also managing a multitude of risks that comes with venturing into international markets. Marine insurance plays a crucial role especially for businesses importing goods given the risks involved in trans-boundary movement of goods,” said Kittony.
“Despite the important role that marine insurance plays in facilitating international trade, it remains largely under-utilized by local businesses. The low uptake has been blamed on several factors key among them lack of awareness, high premiums and the fact that most goods are insured in the country of origin.”
Agnes Ndirangu, Chief Manager Technical Division at the Insurance Regulatory Authority, representing IRA Chief Executive Sammy Makove, said the marine insurance business currently at Sh2.5 billion is expected to rise significantly following the government directive.
For goods to be cleared at the point of arrival, importers will now have to furnish a local certificate of marine insurance to the Kenya Revenue Authority (KRA) or face penalties.
The move by the government is expected to boost uptake of marine cargo insurance. Kenya Orient is also targeting anticipated growth in demand for marine insurance to grow revenue and profits.
“We are looking at new opportunities to strengthen our business portfolio; marine cargo insurance is one of them. With increased trade between Kenya and the rest of the world, marine cargo insurance is an excellent opportunity for new business,” said Kenya Orient Chairman Julius Muya.
There are two classes of marine insurance, namely hull and cargo, with the former covering ships and other seaborne vessels as well as aircraft. Orient Marine Cargo includes three classes of marine insurance as defined by the Institute of Cargo Insurance and covering a variety of risks including fire, vessel sinking and collision, loss of cargo or washing overboard.
According to the Kenya Economic Survey 2016, the total value of the country’s imports stood at Sh1.5 trillion last year. Kenya’s main imports include petroleum, industrial machinery, motor vehicles, iron, steel, wheat, pharmaceuticals and general merchandise.