The rollout of the directive requiring importers to source marine insurance from local underwriters is now set to start next month, ending a four-and-half month delay due to a system hitch.
Insurance Regulatory Authority (IRA) Chief Executive Godfrey Kiptum said the directive, which was initially supposed to start on February 14, was delayed due to system challenges.
IRA is partnering with Kenya Revenue Authority (KRA) on the rollout, which promises to increase marine insurance business to local insurers while dealing a blow to foreign firms.
“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,” said Mr Kiptum during a session with journalists in Naivasha.
Marine insurance policy protects goods from risk of loss, damage and theft during transit by sea, land, and air from the port of origin.
The cover protects importers from loss, giving financiers the comfort to lend to such businesses ordering for the goods.
Kenya came up with the compulsory local marine cover through the Marine Insurance Act CAP 390 and Insurance Act, that outlawed the sourcing of marine cargo insurance policies from insurers not locally licensed.
The changes set in on January 1, 2017 but compliance has been low given that KRA has been clearing imports whether their marine cover is from a local or foreign insurer. The teaming up of KRA with IRA on enforcement, promises to boost the compliance but the delay in the roll out of the crucial system means foreign insurers continue to compete with local insurers on underwriting goods entering the country.
KRA had said in January this year that the enforcement would require importers to digitally procure marine cargo insurance cover for their imports from locally licensed insurance companies prior to obtaining custom clearance.
IRA data shows marine and transit insurance has been growing, with premiums hitting Sh4.66 billion in 2024, a 5.7 percent growth from Sh4.44 billion in the preceding year and 72.6 percent rise when compared with Sh2.7 billion in 2016, just before the directive on marine insurance set in.
However, Kenya’s value of principal imports hit Sh2.71 trillion in 2024, a growth of 3.6 percent from Sh2.61 trillion a year earlier and 64.7 percent rise from Sh1.64 trillion five years earlier, convincing insurers that they have barely scratched the surface when it comes to marine insurance.
When the system is rolled out, importers will be required to request for digital marine cargo insurance certificates through the clearing agents and importers’ mobile apps, dedicated portals, or underwriters’ platforms connected to the IRA electronic platform.
The processed digital marine certificate from the IRA platform will be electronically submitted to the KRA’s Integrated Customs Management Systems (ICMS), which supports import and export processes.
