Insurers bemoan low marine cargo insurance uptake, blame taxman

Insurers are yet to feel the full impact of a new law compelling importers to insure their cargo with local firms, six months after it came into force.

Latest data collected by Association of Kenya Insurers (AKI) shows that local marine cargo insurance premiums grew by 57 per cent in the first quarter of this year.

Premiums collected hit Sh550 million compared to Sh350 million during the same period last year.

AKI Chairman Patrick Tumbo, however, said in a statement yesterday despite the marked improvement, this was still underwhelming going by the industry’s expectations in the wake of the amendment of section 20 of the Insurance Act.

“The growth in percentage looks impressive, but in absolute numbers, this premium volume falls below the expectations. Going by import numbers, the premiums written should be in the range of Sh3 billion and above,” said Mr Tumbo.

Projected billions

Commenting on the AKI data, Britam Group Managing Director Benson Wairegi also expressed dismay at the uptake of marine cargo insurance from local underwriters, saying it was below expectations.

“There were very high expectations of premiums, but it did not grow as expected after the enforcement of the law. At the moment, Kenya Revenue Authority (KRA) and Insurance Regulatory Authority (IRA) have not yet been able to produce regulation and administrative procedures and therefore, not much has taken place,” said Mr Wairegi.

“KRA is supposed to set up a window of enforcement,” he added.

He said the law also came into force when most importers had already taken up insurance and premiums recorded last year.

“There has been tremendous growth, but the growth has not been in line with industry expectations, which projected billions,” he added.