Insurer seeks to grow political risk cover ahead of polls
African Trade Insurance Agency (ATI) is angling to grow its Kenya political risk cover portfolio ahead of the March General Election, the firm said Thursday.
The pan-African financial institution has received equity capital of Sh1.2 billion ($15 million) from the African Development Bank (AfDB) to help it facilitate regional trade and foreign direct investments in Kenya through its insurance products.
ATI said the experience of the 2007/2008 post-election violence in Kenya had increased the need for products such as political risk insurance to protect investors against financial losses that may arise from government action, inaction, or interference.
“We are getting a lot of enquiries for risk insurance products especially from foreign investors,” said George Otieno, the chief executive of the agency.
Last year, the nine-member multilateral institution underwrote political risk covers in Kenya to the tune of Sh84 billion mostly in infrastructure projects such as roads, building construction, electricity transmission and port expansion.
“Additional political and commercial risk insurance will help attract investors while also supporting the ability of local companies and exporters to more safely take advantage of business opportunities in the region,” said Mr Gabriel Negatu, the East African regional director, AfDB.
AfDB now holds a 10 per cent shareholding in ATI and will also be entitled to a seat in the firm’s board where Kenya holds a 16 per cent stake.
The insurance firm says it has facilitated trade and investment opportunities worth Sh240 billion since 2001.
“As an African risk insurance option, we are raising the confidence level for investors and companies coming to Africa. This also changes the foreign perception that this is the riskiest continent in the world,” said Mr Otieno.