The law compelling importers to insure cargo using local underwriters has failed to bear fruit, with insurers registering even fewer premiums in the first nine months of 2019.
The latest data from the Insurance Regulatory Authority shows that gross premiums under the marine and transit segment declined by 12.8 per cent to Sh2.5 billion in the third quarter compared Sh2.9 billion in the same period last year.
This is even after suspended Treasury Cabinet Secretary Henry Rotich pushed for enforcement of section 20 of the Insurance Act, which prohibits importers from insuring their cargo with foreign companies, in what was aimed at boosting local businesses.
The marine insurance class generally increased since June 2017 when Mr Rotich gave the directive to the Kenya Revenue Authority to ensure implementation of the law.
“The overall performance in this class of insurance has significantly improved since the National Treasury directive to enforce Section 20 of the Insurance Act came into effect on January 2017,” said the Association of Kenya Insurers.
“Given the import volumes into the country, the premium remains much lower than what the industry anticipated.”
The lobby, whose chairman was quick to downplay the significance of the directive, said that efforts were ongoing between underwriters and relevant government agencies to digitise the purchase process.
Insurance gross premium grew by 6.5 per cent during the first nine months of 2019 to Sh174 billion, from Sh164.27 billion reported in 2018.
Gross premium under general insurance increased by 3.7 per cent to Sh105.2 billion with most of the business coming from medical insurance, which contributed 34.5 per cent of the total.
Motor insurance also maintained a leading position in terms of contribution to the total.
Long term insurance grew by 11 per cent while general insurance grew by only 3.7 per cent.
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