Chief Executive Peter Nduati said the firm incurred huge losses because of an increase in claims and continued disruption of its activities by the civil war. PHOTO:COURTESY
Overwhelmed by a spike in claims occasioned by civil wars, Resolution Insurance Group has decided to wind up its operations in South Sudan.
The Kenyan insurer exit comes barely six years after it entered the war-torn nation.
Chief Executive Peter Nduati said the firm incurred huge losses because of an increase in claims and continued disruption of its activities by the civil war.
In the recent years, Resolution Insurance has been forced to evacuate its staff from South Sudan following heavy fighting between Government and rebel forces.
“What is remaining in terms of our business in South Sudan is Sh20 million. We faced several challenges leading to a loss of over Sh130 million,” said Mr Nduati in Mombasa at the weekend.
He said besides an increase in the number of claims, the civil war had led to mass resignations of its employees, making the venture in the country untenable.
Resolution Insurance Group had partnered with South Sudan’s Speed Insurance to get a foothold in the country.
Before fresh civil war broke out in 2013, South Sudan was a key market for Resolution Insurance, with the business there having contributed about 30 per cent of its Sh30 billion revenue reported in 2014.
Nduati said following an escalation of the civil war, the firm had evacuated most of its workforce from the country and declared that it had no plans to “go back in the foreseeable future” due to its unpredictability.
“We insure NGOs, Government employees and oil well workers, but we have reduced our presence significantly. We tried to remove civil wars from our package but it has not worked,” he said.
Other major regional insurers had also moved into South Sudan after it adopted the Kenya’s insurance regulatory system.
Mr Nduati said the firm will expand its Ugandan and Tanzanian branches after recently acquiring licenses for general cover and also expand into marine insurance cover.
Other venture the underwriter is targeting is the Sh30 billion marine insurance after the law compelling importers to buy their cover from local firms came into effect.
He said the firm targets at least 20 per cent of the market segment.