Local insurers eye bigger share as marine cover rollout resumes in July
The directive, which was supposed to take effect in mid-February, was delayed due to technical problems with the new system being developed in partnership with the Kenya Revenue Authority (KRA).
A directive that will compel importers to buy marine cargo insurance from local firms is now set to begin in July after a lengthy delay caused by system hitches, according to the Insurance Regulatory Authority (IRA).
The directive, which was supposed to take effect in mid-February, was delayed due to technical problems with the new system being developed in partnership with the Kenya Revenue Authority (KRA).
IRA Chief Executive Godfrey Kiptum confirmed that preparations are now complete and the rollout will proceed next month.
"This was to take off in February but has been delayed... We think we will roll it out in the month of July. There was a challenge with the system but we are now ready," Kiptum said during a session with journalists in Naivasha.
The new measure is expected to boost the market share of local insurers by locking out foreign insurance companies from underwriting goods imported into Kenya.
Under the Marine Insurance Act, CAP 390 and the Insurance Act, only locally licensed insurers are allowed to provide marine cover, but enforcement has been weak since KRA has continued to clear imports regardless of where the insurance is sourced.
KRA said earlier this year that importers will be required to procure digital marine insurance covers from licensed local providers before they are allowed customs clearance.
These will be processed through apps used by clearing agents and importers.
Marine insurance policies protect imported goods from damage, theft and loss during transit.
This helps lower the risk for lenders financing such shipments.
The move to tighten compliance is expected to help local insurers tap into the growing import market.
IRA data shows that marine and transit insurance premiums reached Sh4.66 billion in 2024, marking a 5.7% increase from Sh4.44 billion the previous year, and a sharp rise from Sh2.7 billion in 2016 before the directive was introduced.
In comparison, the value of Kenya’s imports hit Sh2.71 trillion in 2024, up from Sh2.61 trillion a year earlier and a major increase from Sh1.64 trillion five years ago.
This growth signals that marine insurance remains an underexploited market for local underwriters.
With the new system now ready, local insurers are optimistic that stricter enforcement and digital integration will lead to a significant shift in business toward homegrown firms.
