Insurers mobilise funds amid rush for political cover

By  John Oyuke

The insurance industry has warned of decreasing investor confidence in the country ahead of the March 4 General Election.

According to Africa Trade Insurance Agency — a multilateral business reinsurance agency based in Nairobi, investor confidence has decreased in the past 12 months. The country has also witnessed increased demand for political and credit risk insurance.

A senior ATI Marketing Officer Souvik Banerjea said demand for political risk covers went up by over 50 per cent during the period especially among banks, telecommunication firms and infrastructure contractors.

He however added that insurance firms will in the next few weeks forming a terrorism insurance risk pool to provide protection against risks of paying huge claims at once, in case of violence. 

“Currently out of the 42 insurance companies in the country, 20 have agreed to support this pool and ATI along with other reinsurers has promised to offer the needed back up support,” Banerjea said at a media briefing on observed financial impact to date of the upcoming national elections in Kenya.

ATI Chief Underwriting Officer  Jef Vincent said the insurer had seen a 113 per cent increase in business volumes in Kenya in the past year.

“This reflects similar trends in other countries undergoing recent national elections, such as Zambia, where ATI saw a 43 per cent jump in business during the year of their elections in 2011,” he explained. ATI issuing polices on transactions worth over Sh40 billion to protect company’s physical assets.

He said ATI has also issued protection of transactions worth over Sh22 billion to both local and international contractors and suppliers issued with government contracts for projects like road construction.

 ATI Chief Executive, George Otieno  said the firm  supported imports from international markets valued at over Sh11 billion.