NAIROBI, Kenya, Apr 24 – Marine cover business has registered huge gains already recording premiums worth Sh700 million in January and February following the government’s directive demanding importers to sign up with local underwriters.
This is according to the Acting Commissioner of Insurance Godfrey Kiptum who sees this as the game changer in the industry, with players fighting for business estimated at Sh20 billion.
“We have are already seen gains from Marine insurance and we are expecting this will increase the penetration of insurance in the year from the current 2.97 percent of Gross Domestic Product (GDP),” said Kiptum.
In 2016, marine insurance underwrote premiums worth Sh2.1 billion.
The law (Section 20 of the Insurance Act)- which was long ignored before it was recently activated by Treasury Cabinet Secretary Henry Rotich – is intended to reverse the scenario in which an estimated 90 percent of importers use policies offered by foreign firms.
Marine insurance is a policy that provides cover for goods while in transit either by sea, air, rail or road up to the warehouse. It is one of the oldest insurance covers in the world.
Marine cargo insurance protects goods from the risk of loss, damage, pilferage and theft during transit by sea, land and air from the port of origin to the final destination.
Several Kenyan insurers have unveiled their marine insurance products in a bid to get a piece of this new business.
The Association of Kenya Insurers (AKI) in December also directed that all marine insurance business must be transacted online.
Gradually all insurers offering marine insurance online will be linked to a single window operated by KenTrade.
Kenya’s main imports are petroleum, manufacturing and agricultural inputs, electronics, pharmaceuticals, machinery, and textiles.