Insurers increase cost of terrorism cover

By James Anyanzwa

Kenya: Reinsurers have increased premium rates for terrorism by between 10 and 40 per cent. Industry insiders are now warning that insurance covers are likely to go up as the increase is passed on to policyholders.

In a statement yesterday, Heritage Insurance Executive Director Joseph Kyungu said the increment was occasioned by the frequent terrorism attacks in the country, and in particular the Westgate Mall attack.

“The ratings of terrorism is based on the property being insured, whether a school, shopping mall, vehicles and even the location,” he said.

The Somali terror group, Al Shabaab, an affiliate of al Qaeda, claimed responsibility for the bloody four-day siege at the upscale mall, during which at least 67 people were killed. The attack began on September 21.

Mr Kyungu was speaking in Thika over the weekend, during the opening of a Heritage and CfC Life branch, which will be located on Zuri Plaza.

The company, with branches in Eldoret, Naivasha, Nakuru, Meru, Nanyuki and Mombasa, plans to open four more branches this year, in line with its strategy to be represented in 30 counties in the next four years. “This ambition is in line with the devolved governance in Kenya, which will ensure more Kenyans are insured,” he said.

Awareness campaign

Kenya’s insurance penetration remains low, with Life insurance at 1 per cent and General Insurance at 3 per cent. The Government, through Commissioner of Insurance has been conducting an awareness campaign in the 47 counties by training insurance agents in order to increase the penetration levels.

“Through this awareness campaign we expect penetration levels to go up in the next three years,” said Kyungu.

He said premium levels written last year were well above Sh120 billion, and would have been more were it not for the competition and premium undercutting, which impacted negatively on profitability and premium volumes.