All those who read my articles will know that I try to keep you up to date with developments in the Kenyan insurance market as I see them. Over the last couple of years, I have given you my view on the new minimum rates being imposed by reinsurers and the affect this would and has had on many of you.
If you have viewed some more recent articles, you will have read about one of our clients who suffered a devastating fire in the middle of the year (Read the blog here). We are pleased to advise that the claim is progressing well and substantial on account payments have been met by the insurers. Nevertheless, I can vouch for the fact that insurers and reinsurers have looked extremely closely at all the ‘small print’ and evidence that the market is following these new rates. As we followed the rules precisely there has been little drama in getting to where we are today, but I dread to think what the outcome would have been if we had not fully complied with these new rates.
Anyway, just as we thought we had seen the end of the changes, we have recently been informed that there are further amends. Some headlines:
- All Class 3 and 4 Fire risks must be surveyed every two years and all risk requirements must be complied with. Class 3 and 4 range from warehouses to plastics industries.
- Business in an EPZ were entitled to a discounted rate, no matter what industry they were in. This no longer applies, and you will be charged at the standard rates if in the higher groups.
- If your asset is near a lake, you can get flood cover, but not consequential loss cover following a flood!
- Private car third party only cover has been increased to KES 12,000 from KES 7,500.
There are many more changes and we have not seen the WIBA changes yet, but we suspect there will be more announced over the next month or so. The important thing to consider now is, are you complying with these new minimum rates and in the event of a major loss, is your insurer financially capable of paying your loss without the reinsurers’ support?
As the saying goes…’if it’s too good to be true…it probably isn’t true’
If you have any questions on this, please do not hesitate to contact us:
Email [email protected] or call us on +254 (0) 709 455026.