Insurance industry prepared to mitigate El Nino losses, says IRA
12 September 2015, 09:33
Nairobi - The Insurance Industry is ready to absorb risks emanating from the forecast El Nino rains which is expected from next month.
Insurance Regulatory Authority (IRA) Chief Executive Officer Mr Sammy Makove said the 49-member industry has adequate covers to compensate for insured losses in case of the El Nino.
He said unlike 1997, when the industry was caught off-guard, it was now well prepared to cushion insured businesses mainly in agriculture, trade, building and construction sectors. “All the risks related to El Nino are all insurable and those who have taken covers will fully transfer the risk to the industry,” Mr Makove said in Nairobi yesterday during a press conference.
He also added: “If someone has not taken a policy, then he should do so rather than wait until the damage has been done.” The regulator gave the assurance as general insurance segment reported a Ksh104.61 half-year underwriting loss.
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The Government has already set aside Ksh5 billion and put 70,000 National Youth Service officers on standby as part of disaster preparedness. Deputy President Mr William Ruto gave the government assurance on Tuesday, in an emergence plan that will involve all government ministries, departments and agencies.
Mr Makove spoke after releasing industry performance for the half-year period through June. Net Premiums during the six-month period reached Ksh70.04 billion, 14.07 percent more than Ksh61.40 billion.
The general insurance accounted for Ksh42.64 of 60.88 percent of the premium earnings, while Ksh27.40 billion was held in life assurance.
“Our agenda is to try to change this balance because if the business is skewed to short term policies, then it means we are not yet developed. In developed markets like South Africa, it is the reverse where life accounts for the larger share,” said Mr Makove.
The general insurance continued to battle rising claims that jumped by a fifth to Ksh24.48 billion in June from Ksh20.40 billion a year ago. The increasing claims condemned the general business to an underwriting loss of Ksh104.61 million from Ksh1.25 billion profit a year earlier.
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