NAIROBI (Xinhua) --
Insurance companies in Kenya are positioning
themselves to reap big from a new law that makes it compulsory
for all imports to be insured locally.
The law, which
came into effect on Jan. 1, requires all imports to be covered
locally, making it easy for importers to make claims, a
departure from the past then they had to lodge claims with
In anticipation for the growth in business, insurance firms
have in the last few weeks been working on systems to comply
with the new rule.
The law, according to the Association of Kenya Insurers
(AKI), is a boost the industry needed to grow the business.
Over the years, marine insurance has been recording low
premium as uptake was generally low due to legal barriers and
lack of awareness.
According to AKI, insurance premiums are expected to grow by
about 198 million U.S. dollars with insurers passing on the
business to reinsurance firms to help absorb the risk.
At 198 million dollars, marine insurance will contribute over
10 percent to the total premiums of 1.7 billion dollars handled
by Kenyan firms.
As at September last year, premiums collected under marine
insurance were recorded at 20 million dollars with reinsurers
receiving 5.5 million dollars.
"Currently, about 90 percent of import insurance business is
handled by foreign firms, which take the profit back to their
"Kenyan insurance firms have long been spectators in the
sector but this law gives them power to take the bull by the
"It is certainly a big boost," said Henry Wandera, an
economics lecturer in Nairobi.