Insurance cover for political risk in east AfricaSeptember 8th, 2008 - 6:53 pm ICT by IANS
Nairobi, Sep 8 (Xinhua) The African Trade Insurance Agency (ATI), the continent’s only multilateral credit and risk insurance agency, Monday signed a landmark agreement with Kenya-based UAP Insurance Company (UAP) that will for the first time allow East Africans to access insurance against damage resulting from political violence. Under the political risk reinsurance cover provided by the agency, UAP will be able to offer insurance against civil disobedience, political violence and terrorism related risks in Kenya, Uganda and southern Sudan.
UAP chief James Muguiyi told journalists in Nairobi that the product has been tailored specifically to the needs of the markets in the three countries.
“It is a product we developed in partnership with ATI in response to numerous enquiries arising from the recent losses running into billions of shillings that individuals and businesses incurred during the unprecedented post-election violence in Kenya,” Muguiyi said.
“Unfortunately, a large number of them were not insured due to the exclusion of political risk from most insurance policies,” he said.
Muguiyi said the UAP insurance has paid out over 60 million shillings (about $857,000) out of its own goodwill to clients who were affected by the post election violence early this year.
“The collaboration with ATI is a major milestone since it enhances our capacity to cover risks that were previously not insured. We have launched similar insurance risks in Uganda and southern Sudan and plan to expand to COMESA (Common Market of East and Southern Africa) countries,” Muguiyi said.
He said the insurance cover will be both for individuals and companies from as low as 500,000 shillings to 50 million shillings.
Muguiyi said the development came on the heels of political upheaval witnessed in the country early this year following the disputed presidential elections.
He said this has made insurance against civil disturbance a key consideration for corporates and individuals with growing appetite in the marketplace.
The ATI chief Peter Jones said the insurance coverage will have a direct and positive impact on the willingness of the financial sector to continue providing long term lending, particularly to small scale enterprises, which are critical in the ongoing economic recovery efforts and in achieving Vision 2030.