Insurers: We have financial muscle to cover marine business

National Treasury Cabinet Secretary Henry Rotich.(Photo: Beverlyne Musili/Standard)
 

Local insurersThursday maintained that they have the financial muscle to underwrite marine cover.

The reassurance comes days before the January deadline, which require shippers to source policy covers locally.

National Treasury Cabinet Secretary Henry Rotich directed the Kenya Revenue Authority (KRA) to work with relevant stakeholders to implement Section 20 of the Insurance Act.

The directive required that with effect from January 1, 2017 all imports to Kenya would have to be insured by locally registered insurance companies.

According to the ICEA Lion CEO Steven Oluoch, reports that insurance players lack capacity to underwrite marine insurance, is a misconception.

“We have substantial technical capacity. Locally, we have the technical capacity to produce a marine policy as good as any in the international market. At ICEA Lion, we have standby capacity of up to 1.6 billion per single shipment,” he noted.

Earlier, shippers Council of Eastern Africa (SCEA) had raised concerns over the capacity of the industry to undertake the marine policies.

The Council CEO Mr Gilbert Langat said that to effectively implement marine insurance, the insurance industry must demonstrate both financial and technical capacity to undertake marine insurance locally.

“The industry must satisfy supply and demand to ensure that local marine is readily accessible,” explained Mr Langat.

But a senior manager with ICEA LION Mr Peter Mukuria said insurers will make use of their re-insurance to undertake huge covers for shippers to enable a smooth transition,n as the implementation of the directive takes shape come January 1st next year.

The insurance sector is expected to grow to Sh15-20 billion as the result of the new government directive requiring all imports to Kenya to be insured by locally registered underwriters.go said.