Local underwriters have been urged to embrace innovation as this will boost their capacity to offer marine insurance.
Shipping and Maritime Affairs Principal Secretary Nancy Karigithu said the maritime sector plays a crucial role in the country’s economy yet the country was losing Sh20-25 billion annually in marine insurance premiums ceded to foreign offshore companies even when compensation was not always assured in case of loss.
“Despite Kenya being a maritime nation and having enacted Section 20 of the Insurance Act in 1984, the local marine insurance has remained one of the sleeping giants of the maritime industry due to non-enforcement of the law and skewed implementation of international commercial terms,” said Karigithu.
The PS made the remarks in a speech read on her behalf by the CEO of the Kenya National Shipping Line Joseph Juma at the unveiling of Kenya Orient Insurance marine cover to freight, logistics and shipping agents in Mombasa on Thursday.
She called on local insurers to be innovative, develop human capital and ability to pay claims while also enhancing intelligence gathering to cope with risks like terrorism, piracy and war.
“Insurers are expected to up their game in terms of sensitisation of stakeholders and establish elaborate ICT infrastructure and package their services in a way that offers competitive rates and faster settlement of claims,” said the PS.
Kenya Orient MD Muema Muindi said his firm was focusing on innovation to make marine insurance more accessible to large and small players in the import/export business.
“We strongly support government initiatives to boost marine insurance uptake and are therefore working closely with shippers, freight stations and logistics firms to sensitize them on marine insurance,” said Muindi.
On his part, Kenya Orient Insurance Chairman Julius Muyah urged Kenyan importers to take up marine insurance covers. “I want to especially encourage SMEs to take up marine insurance seriously as a tool for reducing risk and lowering costs of doing business thus enhancing their competitiveness.”
Kenya Orient Insurance was among the first insurance companies to launch an online marine insurance portal. Muindi said his firm was eyeing a larger share of the marine insurance business estimated to hit Sh28 billion by 2020.