Push on for political risks cover

Political risks may be covered in Kenya if insurance industry players adopt models that have been used elsewhere.

This follows the effects of the early post-election violence on businesses in early 2008.

The upheaval led to the loss of property by many businesses, some of which are yet to be compensated.

According to chief executive of the Insurance Regulatory Authority, Sammy Makove, the idea was borne out of the experience.

“It is ideal that as an industry we venture into underwriting of political risks owing to what happened in this country,” said Mr Makove.

The unprecedented events offered challenges to the industry as to whether to compensate those who were affected. Many in the industry were quick to nullify liabilities on the basis of political risk exclusion.

However up to date, some companies have agreed to pay the affected businesses.

Jubilee Insurance Company is the latest in this having paid at least Sh40 million last week.

The regional insurer noted that nine Kisumu-based businesses in the tourism, construction and investment areas had received compensation for the damages they incurred during the violence.

Political risks have remained excluded in the industry and until the violence, the area was a no-go zone.

The firms that have moved in to settle the claims for business which were hit, did so more out of compassion.

Some business are still looking up to insurance firms to come to their rescue a year after the post-poll violence.

Good model

Speaking on the sidelines of a presentation made by South African Special Risks Insurance Association (Sasria) at a Nairobi hotel on Monday, Kenya Re managing director Eunice Mbogo lauded the move.

“It is a good model that we would want to emulate as an industry. We are positive that we can deliver it in the shortest time possible,” she told journalists.