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Ruto-linked insurer cuts SK Macharia matatu dominance
Amaco’s growth in PSV insurance business was alongside a 2.7 times jump in premiums from insuring of commercial vehicles (excluding PSVs) to Sh657.4 million to get a market share of 3.01 percent from 1.18 percent.
A quiet shake-up is unfolding in Kenya’s public service vehicle (PSV) insurance market that has seen a firm linked to President William Ruto win business worth billions of shillings at the expense of media mogul Samuel Kamau (SK) Macharia.
Africa Merchant Assurance (Amaco), partly owned by President Ruto’s family and close allies, has more than doubled its market share in just a year, cutting the dominance long held by Mr Macharia’s Directline Assurance.
Insurance Regulatory Authority (IRA) disclosures show Amaco’s market share jumped to 37.51 percent of the Sh5.29 billion premiums from the matatu industry at the end of December from 14.95 percent a year earlier.
Directline, which is locked in shareholder wrangles, has seen its market share fall from 61.56 percent to 47.97 percent in the period under review.
This has seen Amaco gain Sh1.15 billion in premiums from the PSV segment to Sh1.98 billion, reflecting a 139.7 percent rise that helped it narrow the market share gap against the SK Macharia firm.
Directline’s premium from the matatu business fell 25.4 percent to Sh2.54 billion, with firm shedding business worth Sh860 million.
This signals that the firm linked with President Ruto is the biggest beneficiary of the market shifts and Directline’s struggles, putting the on-and-off foes in a head-to-head fight for the PSV business.
President Ruto and Mr Macharia have often stood on opposite ends of Kenya’s political divide, with the media mogul having backed opposition leader Raila Odinga in the presidential elections.
Mr Macharia backed Mr Odinga against former President Uhuru Kenyatta, who was deputised by Mr Ruto. He later backed the opposition leader in his unsuccessful bid for the presidency against President Ruto in 2022.
Analysts link Directline’s market loss to the shareholders' wrangles in the firm and its fights with the regulator that was triggered by Mr Macharia’s pronouncement in June 2024 that all workers in the firm were fire and insurance policies invalid.
Mr Macharia had for several months run cautionary adverts claiming that any insurance cover issued by the company was “invalid” due to “illegal” alteration of the share registry.
This triggered action from the IRA, which, through courts, forced Mr Macharia to stop the campaign that rattled policyholders and Kenya’s insurance market.
The media mogul claimed that the company's shareholding was unlawfully altered using a forged CR12 form, leading to unauthorised changes in the company's ownership that understated his stake.
He withdrew Sh400 million from the insurer in the middle of the board and shareholder wrangles, prompting the regulator in October 2024 to push for a reversal after court action.
Last year marked the first time that Directline, which is partly owned by Mr Macharia and his wife directly and through Royal Credit Limited, has seen its market share drop below 50 percent since the IRA started disclosing PSV as a separate insurance line.
Apart from eating into Directline’s stake, Amaco may have also benefited from the near collapse of Invesco Assurance—another PSV insurer which slipped into statutory management last year, barring it from continuing to underwrite any class of insurance.
Invesco had premiums worth Sh138.5 million or 10.79 percent at the end of March 2023 and in December of the same year had a market share of 8.15 percent or the third largest in the PSV segment.
It went into statutory management on the back of defaulting on claims payment.
Behind Directline and Amaco in the commercial PSV covers are First Assurance, with a market share of 9.45 percent, GA (2.62 percent), Intra-Africa (0.83 percent), Kenya Orient (0.7 percent) and Fidelity Shield (0.6 percent).
Amaco's rise emerged after a period that saw the insurer get locked in several court cases that prompted auctioneers to move in for its assets amid cases of defaulting on claims.
Business Registration Services (BRS) records showed President Ruto’s family held 190,000 shares or 15.83 percent of Amaco through Yegen Farms Limited where First Lady Rachel Ruto and daughter Charlene Ruto were listed as shareholders as at October 25, 2024.
The first family’s latest shareholding in Amaco is nearly four times the 50,000 shares it held through Yegen by July 2022. Charles Tela Alusala, an accountant who handles the family’s affairs in some of their other companies, holds 130,000 shares or 10.83 percent of Amaco.
Dr Ruto’s business associate and friend Silas Kibet Simwato, who chairs the Digital Health Agency, directly owns 40,600 shares or 3.33 percent in Amaco while his family owns 150,000 shares or 12.5 percent through Vomorono Limited, and another 90,000 or 7.5 percent through Joubert & Borman Ltd.
President Ruto, who at one point directly owned 128,000 shares in Amaco, relinquished them to Joubert & Borman Ltd.
Amaco’s growth in PSV insurance business was alongside a 2.7 times jump in premiums from insuring of commercial vehicles (excluding PSVs) to Sh657.4 million to get a market share of 3.01 percent from 1.18 percent.
Under private motor covers, the premiums jumped by 29 percent to Sh515.4 million to give it a 1.78 percent market share.
The jump in premiums for Amaco in commercial vehicles excluding PSVs helped it overtake Directline which saw its market share shrink to 0.85 percent from 1.7 percent on the back of premiums from this line of business declining by 47.3 percent to Sh184.72 million.
Under private vehicles insurance, Directline’s stake was also on decline, ending December at 2.28 percent from 3.59 percent as premiums shrank by 36.5 percent to Sh659.88 million.
Motor vehicle insurance business in Kenya has three classes—motor private for private vehicles, motor commercial for commercial vehicles excluding PSVs and motor commercial PSV that is exclusively for PSVs like matatus.
Many insurers have been aggressive in revising premiums upwards to reflect the level of risk in the market and dropping comprehensive covers for some models of vehicles deemed too risky.
There have also been insurers adopting telematics—in-car monitoring devices— to adjust premium rates based on policyholders' mileage and driving habits while others have been demanding cashless fare payments.
Overall, motor vehicle insurance remains problematic for the insurance sector, according to the IRA data.
In the year ended December 2024, underwriting losses from insuring private vehicles widened to Sh3.06 billion from Sh2.6 billion as the loss from commercial vehicles improved slightly to Sh3.04 billion from Sh3.3 billion. Underwriting loss from commercial PSVs rose to Sh498.35 million from Sh355.25 million.
