More businesses now take up insurance amid political chaos

Traders salvage their valuables after a fire broke out at Jua Kali auto trading and repair centre during the demos in Kisumu city on Wednesday 12, 2023. [Michael Mute, Standard] Retailers, pharmacies, liquor stores and other merchants across the country are taking up insurance that protects buildings and businesses from damage caused by societal unrest. They are worried about possible escalation of street violence during the Opposition-led anti-tax protests, insurers and brokers say. Many shops and offices are consequently facing double-digit premium hikes for such policies but are left with no choice because the cost of not doing so might be higher, industry sources said. Hundreds of thousands of demonstrators yesterday took to the streets in major towns around the country as the anti-tax protests intensified, forcing banks, stores, shopping malls, restaurants and even government buildings to close as the demonstrations degenerated into violent clashes between police and activists. Footage from various cities showed police using tear gas and water cannon to disperse crowds in Nairobi and multiple towns. Angry protesters were also seen tearing down a section of the fence of the Nairobi Expressway connecting the Jomo Kenyatta International Airport to Nairobi's Central Business District, while in other towns they engage the police in running battles and burnt tyres on the roads. Various businesses were also vandalised. Moja Expressway, the company managing the expressway, confirmed the destruction and advised motorists to seek alternative routes. "We regret to inform you that a section of the Nairobi Expressway toll services has been temporarily halted at Mlolongo, Syokimau, and SGR (Standard Gauge Railway) toll stations due to the ongoing demonstrations. Efforts are underway to restore normalcy to the road," Moja Expressway said. Businesses fear if the protests and demonstrations last for an extended period, business confidence be affected, raising the risk of job losses and other blows to the fragile economic recovery, they say. "Most requests (for insurance cover) are coming from corporates operating in urban areas, manufacturers and transporters of fast-moving consumer goods," Liaison Group Risk Manager Dennis Karanja told Standard Business in an earlier interview. "Although covering the assets remains the main focus for many clients, we are foreseeing increased interest in the insurance of loss of business (business interruption) arising out of political violence. One of the greatest fears for any business is losing assets plus the inability to produce and deliver goods and services to its customers," said Mr Karanja. "The current political environment has led to more enquiries about the exact scope of cover and requirements to accept the risk." The protests, according to opposition chief Raila Odinga, are meant to pile pressure on the Kenya Kwanza administration to address the rising cost of living crisis and electoral reforms following last August's disputed presidential polls. The Azimio leader yesterday afternoon called off a planned rally at Kamukunji Grounds in Nairobi, citing "increased police shootings, assault and harassment meted on supporters." The start of implementation of the Finance Act, 2023 has emboldened the opposition, which noted that some of the clauses, including the hike in taxes on fuel, would make the already high cost of living worse. Other than the higher prices of fuel, which are expected to see the cost of most essential goods and services rise, the government is also implementing the affordable housing levy that many say will see a reduction in the disposable income of many Kenyans. The return of mass action has sent jitters through the business community, which is worried about the impact on their operations. Traders fear any sustained unrest would cast a dark cloud over their operations and the local economy, which is already facing several local and external shocks. Some businesses were vandalised, according to police, incurring heavy losses. The Kenya Private Sector Alliance (Kepsa) earlier put the losses at Sh3 billion per day on usual protest days, losses emanating from the destruction as well as lost revenue as businesses remain shut. Escalated unrest could also undercut one of Kenya's key foreign revenue generators - tourism, players said. bngugi@standardmedia.co.ke

More businesses now take up insurance amid political chaos

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More businesses now take up insurance amid political chaos

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