Safaricom has developed a system aimed at tightening enforcement of local marine insurance rules on imports, supporting the Insurance Regulatory Authority (IRA) and Kenya Revenue Authority (KRA) after previous false starts.
In February last year, IRA and KRA announced strict enforcement of the 2017 rules requiring all importers to buy marine cover from local insurers.
However, this was scuttled by system failures, condemning premiums from marine and transit insurance to their slowest growth pace in four years at 2.9 percent to Sh4.8 billion in 2025.
Now IRA and KRA have tapped Safaricom to develop a system that will be used in issuing digital certificates, with the rollout expected this month. This will mark the latest attempt to seal implementation gaps that have allowed importers to bypass local insurers.
‘We had a problem with the system last year. The system did not work as expected. It failed us but now everything has been finalised and we are ready for a fresh roll-out,’ said Godfrey Kiptum, chief executive at IRA.
‘We should be starting this May. We will issue a formal notice once we agree with the KRA on the exact date. The new system has been developed by Safaricom and it will be issuing digital marine certificates.’
Marine insurance policy protects goods from the 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. The new system will see all importers digitally procure marine cargo insurance for their goods from locally licensed insurers prior to obtaining custom clearance.
A processed digital marine certificate will be electronically submitted to the KRA’s Integrated Customs Management Systems (ICMS), which supports import and export processes.
Last year’s teaming up of KRA with IRA on enforcement had promised to boost the compliance with the changes that were made to the Marine Insurance Act CAP 390 and Insurance Act, outlawing 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.
Kenya’s value of principal imports hit Sh2.772 trillion last year, a growth from Sh2.706 trillion a year earlier and 30.8 percent rise from Sh2.119 trillion five years earlier, convincing insurers that they have barely scratched the surface when it comes to marine insurance.
Marine insurance premiums jumped the fastest in 2017 at 34.4 percent to SSh3.63 billion when the law on compulsory sourcing of the cover locally kicked off. However, the business dropped for three consecutive years before setting on a recovery in 2021, according to IRA data.