Local marine cargo insurance premium has grown 64 per cent in the first half of the year according to the Association of Kenya Insurers (AKI), a performance the lobby says is still below par.
The industry association said premiums collected by members hit Sh1.14 billion compared to Sh694.9 million in a similar period last year.
“Though positive, the premiums are yet to meet the industry estimation, which was projected to be at least Sh5 billion by half year, based on the country’s import figures,” said AKI in a statement.
Out of the 35 insurance companies that wrote the risk in the six months, only two recorded premiums of Sh100 million and above.
The highest premium was Sh135.99 million which AKI said highlighted the underwriting muscle some of the companies possess. It said this was important in winning the confidence of importers.
In January, Kenya started to implement a law compelling importers to buy marine cargo insurance policy from local firms. The law prohibits procurement of marine insurance cover from foreign firms “except in exceptional circumstances.”
The lobby Wednesday said it was engaging stakeholders to eliminate all headwinds they are facing from the use of online portals by importers to get the cover.
“Engagement between KRA, (Kenya Revenue Authority), IRA, (Insurance Regulatory Authority) KenTrade and AKI are ongoing to ensure that the automation of marine cargo insurance is completed as soon as possible to make the purchase of marine cargo insurance by importers easy and convenient,” said AKI.
Insurance companies in the general business have been aggressively positioning themselves to take advantage of the marine cargo insurance windfall that is expected to boost their premiums by up to Sh17 billion.
Marine insurance covers movement of cargo from one location to another against risks like damage, pilferage, theft or non-delivery. It is currently the preserve of deep-pocketed foreign underwriters.
Statistics show Kenya imports goods worth Sh1.57 trillion annually, with 90 per cent of this previously insured by offshore providers.
The imports are expected to hit between Sh2 trillion and Sh2.2 trillion by 2020, yielding potential marine cargo insurance spend of over Sh30 billion annually in premiums.
Britam #ticker:BRIT is the largest marine underwriter in Kenya.