By Caroline Njenga
The government is planning to form a taskforce that will outline lasting solutions for the various issues raised by stakeholders in Marine Insurance.
Principal Secretary in the State Department of shipping and Maritime Affairs Nancy Karigithu says the taskforce will establish why many importers and exporters prefer to procure insurance covers overseas as well as devise strategies for the implementation of the Marine Insurance policy.
Last year, the port of Mombasa handled an average of 68% local cargo destined for the Kenyan market.
Within the same period, marine insurance premiums that were taken out were Ksh. 2.7 billion and Ksh. 2.9 billion respectively.
The Association of Kenya Insurers indicates that the lowest premium for marine insurance is 0.18 per cent for fertilizers and highest was 1.4 per cent.
Research further reveals that Kenya has one of the lowest premiums in the world. It is for this reason that the Cabinet Secretary for National Treasury Henry Rotich while delivering the 2016/2017 budget directed that importers obtain marine insurance locally by January 2017.
This is because the industry is losing close to 23 billion shillings to foreign insurers.
As the implementation date draws near, the Ministry is holding consultative meetings with industry players to ensure a smooth transition into procuring marine insurance locally for imports.
The Principal Secretary in the State Department of Shipping and Maritime Affairs Nancy Karigithu says a task force will be established to find lasting solutions to challenges that have been identified and those that may arise in the implementation of the new policy.
The task force will be expected to establish why many importers and exporters prefer to take cargo insurance cover overseas, develop a joint action plan of all concerned parties for awareness campaigns on appropriate use of Incoterms across the country.
The chief executive of the Shippers Council of Eastern Africa Gilbert Langat says to effectively implement marine insurance, the insurance industry must demonstrate both financial and technical capacity to undertake marine insurance locally.
He notes that the industry must satisfy supply and demand to ensure that local marine is readily accessible and that price competitiveness of the products are locally available.