By John Oyuke
Insurance firms are betting on risks related to elections to sign up new clients.
Already, a number of them have rolled out political violence risk products and campaigns to tap into the hitherto slow market.
The economy has been wary of politics — taking a dip every election season. The 2007 General Elections were particularly telling of the relationship between politics and the country’s growth curve.
In 2007, the economy expanded by 7.1 per cent, marking the fifth year of consecutive economic expansion.
In 2008 however, the economy ebbed to 1.7 per cent — the lowest point under Kibaki presidency. Besides the unfavourable international environment, much of the problem was fanned by violence, following the disputed presidential elections.
Several properties and investments went up in smoke. There was also massive capital flight as investors held back any further expansions.
As a result of this destruction, policyholders lodged compensation claims totalling Sh1.2 billion with local insurers. This came about, at a time when political riots, terrorism and economic sabotage were then classified as non-insurable.
With another election around the corner, insurance firms that had stayed away from the cover are rolling out products targeted at investors increasingly seeking to shield their business interests.
The latest kid on the block, Kenya Orient Insurance Ltd, is already making known the existence of its new product – dubbed Orient Political Risk - through strategically located bill boards in the city.
The firm told Business Weekly the policy introduced quietly into the market two months ago covers business, property or assets should they be damaged or destroyed in the event of political violence or acts of terrorism. The cover takes care of previously excluded political risks in most insurance policies including changing global political landscape, political uncertainties and acts of terrorism and political riots.