Financial services provider UAP Old Mutual Group expects accelerated growth in its marine insurance with the commencement of section 20 of the Insurance Act that compels importers to buy policies from local underwriters.
The move comes in the wake of a directive from Treasury to importers to buy policies from local insurers beginning January 2017. In June this year, the group introduced Specialty Insurance in conjunction with its parent company Old Mutual Specialty Insurance, a global leader in speciality underwriting. Following the partnership, UAP Old Mutual has the capacity to underwrite up to $250 million (Sh25billion) sum insured in any one-risk location.
“Importers have traditionally preferred to use foreign firms especially when importing cargo such as mining and construction equipment. We believe the law will help buyers avoid the risks associated wholly on sellers to acquire insurance for their cargo,” said UAP Old Mutual Group Chief Executive Officer Peter Mwangi.
Mr Mwangi said the new requirement is a boon for the local industry as it comes at a time when importation of high worth equipment and raw materials is expected to increase as a result of the massive infrastructure projects currently underway in the East and Central African region.
The development of the regional oil, gas and mining industries is also expected to catalyse the speciality insurance business, which offers specialised covers for commercial property, energy, construction, political risk and trade credit.