Several underwriters are already positioning themselves to reap from the new law that is expected to be hand them a Sh17 billion windfall. These include Britam, CIC, Sanlam, Jubilee and UAP – all of which have recently disclosed that they are sharpening their claws for high value marine contracts.
According to industry estimates, Kenyan insurers handled Sh2.9 billion worth of marine cargo insurance premiums and this figure is expected to hit Sh20 billion under the new law.
Official statistics show that Kenya imports Sh1.57 trillion worth of goods annually, with 90 per cent of the imports being insured with foreign underwriters.
The average cost of marine insurance is about 0.5 per cent of the value of imported goods.
“This means that Kenya’s importers are exporting about Sh20 billion per year, typically in hard currencies, to foreign, offshore insurance companies and industries,” Transport Cabinet Secretary James Macharia said in a statement last month.
Imports to Kenya are expected to hit Sh2 trillion by 2020 – resulting in a potential marine cargo insurance expenditure of over Sh30 billion a year in premiums.
Marine insurance, which is presently the preserve of large foreign underwriters, covers movement of shipment from one location to another against risks such as damage, pilferage, theft or non-delivery.
Britam Holdings was the major player in the local marine insurance business controlling some 12.6 per cent of the total paid premiums as at the end of September 2016, followed by Kenindia and ICEA Lion at 9.4percent and 8.7 per cent respectively.