Africa’s sole risk insurance body, the African Trade Insurance Agency (ATI), has announced a new partnership with insurance firms across East Africa to cushion investors against losses incurred as a result of politically-motivated violence.
Kenyan insurer UAP was among the first batch of insurance firms to strike an accord with the pan African insurer to offer the services to clients who incur huge losses as a result of political violence such as the type witnessed in Kenya in January this year.
Kenyan insurance firms have historically considered riots, political violence in the category of floods and other natural disasters which do not enjoy insurance cover.
UAP Insurance Company Managing Director James Muguiyi said the firm would for the first time offer political risk insurance cover to its clients, following its signing of a joint agreement with the ATI to offer the services to a wide range of customers.
ATI is an institution set up under the ambit of the Common Market for Eastern and Southern Africa (COMESA) to provide investors with a source of confidence. This confidence is considered critical in attracting new foreign investments into Africa.
Muguiyi said Kenyan would now access political risk insurance which would cushion them against any losses incurred as a result of violence, caused by politically-motivated violence.
Kenya, which was considered East Africa’s most stable democracy until its disputed presidential elections in December 2007 sparked a wave of political violence, is rapidly gaining notoriety as a volatile state, especially as elections approach.
Muguiyi said the new insurance product developed with ATI was tailored specifically for the needs of the Kenyan market.
“It is a product we developed in partnership with ATI in response to numerous inquiries arising from recent losses running to billions of shillings that individuals and businesses incurred during the unprecedented post-election violence,” Muguiyi told journalists here.
He said most Kenyan businesses were not insured due to the exclusion of political risk from most insurance policies.
Kenyan corporates are considering investing in civil disturbance as a result of the violence that was witnessed in the East African country.
ATI is also spreading the product to Burundi, Uganda, Rwanda and Tanzania.
ATI Chief Executive Peter Jones said the signing of the agreement with the Kenyan firm was a major boost to its efforts to offer co-insurance and re-insurance business.
He said ATI was fulfilling its core mandate of facilitating, encouraging and developing the provision of insurance, including guarantees and other financial instruments to promote trade and investments in Africa.
“This product will have a direct and positive impact on the willingness of the financial sector to continue providing longer term lending, in particular the provision of lending products to small and medium enterprises (SMEs), which is a critical element in the ongoing recovery efforts to achieve (Kenya’s economic blueprint) Vision 2030,” he said. Panapress .