MARINE CARGO INSURANCE TAKING ROOT FOR LOCAL INSURANCE SECTOR
KEPSA in collaboration with the Kenya Revenue Authority (KRA), Kenya Trade Network Agency (KENTRADE) and Insurance Regulatory Authority (IRA) held a sensitization workshop on Marine Cargo Insurance (MCI) at Sarova Panafric Hotel on 17th March, 2017. The aim of the workshop was to ensure understanding of the MCI processing; identify the emerging gaps and challenges; and provide possible solutions to the identified challenges.
The meeting was informed by Section 20 of the Insurance (Amendment) Act which requires mandatory local underwriting for all imports. About 90 per cent of cargo import insurance is currently handled by foreign firms with importers paying the premiums as part of a package (Cost, Insurance and Freight- CIF) to the exporter who handles the underwriting. Marine Cargo Insurance (MCI) policy provides indemnity against loss or damage for goods being transported by sea or air, and incidental land transportation. This includes transit cargo to neighboring East Africa Community partner states, Democratic Republic of Congo and South Sudan.
The implementation of MCI is being overseen by the KRA, KENTRADE and IRA, which will now require importers to show their insurance contract with a local firm before clearing cargo.
In her presentation, the Principal Secretary, Shipping & Maritime Affairs Ms. Nancy Karigithu explained in a broad perspective the opportunities for economic growth in the maritime sector. She demonstrated the inter-link between the industries and human activities centered on the sea. She emphasized that MCI was a minute part of the larger maritime sector and illustrated how the blue economy in Kenya is one the most unexplored industries. She urged the private sector to invest in this sector as this translates to employment opportunities for the youth in Kenya.
In her remarks, KEPSA CEO Ms. Carole Kariuki noted that insurance coverage in Kenya is below 5% and encouraged insurance companies to develop products that will attract more Kenyans to purchase Insurance policies. She said she hoped that MCI will help increase business in the country and added that Kenya has come too far in positioning herself as a regional transportation hub and we should leverage on geographic advantage for both short and long term goals of the country.
The KEPSA Transport, Infrastructure and Urban Housing chair, Mr. Auni Bhaiji said that this was an important workshop in engaging all stakeholders on MCI. Being an important concept, he highlighted the importance of importers understanding their role and how they are supposed to procure MCI to ensure smooth implementation.
Billy Ngumi from KENTRADE illustrated the role of a Single Window System in processing of Marine Cargo Insurance and the short and long term goals.
On his part, the UAP-Old Mutual Managing Director, Mr. James Wambugu dispelled fears that MCI will increase costs of doing business. He said that only a few insurance companies were certified to provide MCI and these would offer the policy based on international standards. Mr. Julius Kihara from KRA in his presentation said that KRA has closely worked with KENTRADE to provide a seamless platform in which Marine Certificates will be integrated into the single window system.
The workshop was supported by one of the KEPSA developed partners, the USAID Funded East Africa Trade Hub. A detailed report will be shared.