Politics and policy

Westgate insurer faces Sh6.6 billion compensation bill

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The Westgate Shopping Mall, which  was attacked by terrorists on Saturday. FILE

The Westgate Shopping Mall, which was attacked by terrorists on Saturday. FILE 

By Mugambi Mutegi, pmutegi@ke.nationmedia.com

Posted  Wednesday, September 25  2013 at  21:33

In Summary

  • The Lloyd’s market tops the list of big losers as Nairobi counts its losses in the wake of a deadly terrorist attack that left at least 67 people dead.
  • More than 50 businesses that operated in the shopping complex, with goods worth billions of shillings, are also facing huge losses whose extent is yet to be determined.
  • Westgate business owners, some of whom tragically lost staff in the incident, are now counting their losses in one of Nairobi’s most prime locations.

London-based insurer, the Lloyd’s market topped the list of big losers as Nairobi counted its losses in the wake of a deadly terrorist attack that claimed at least 67 lives and left dozens missing.

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More than 50 businesses that operated in the shopping complex, including Nakumatt Supermarkets, Barclays Bank, restaurants, jewellery and clothes shops, with goods worth billions of shillings, are also facing huge losses whose extent is yet to be determined.

The more than 500 people who worked in the shopping mall have been left jobless and the announcement that three of the building’s floors had caved in during the three-day battle with the terrorists means it will take months for the businesses to get back into operation.

It has since emerged that Sony Holding Limited, a real estate company led by Alex Tachenberg, insured Westgate Shopping Mall through UK’s Lloyd’s market for about Sh6.6 billion.

The Lloyd’s market is a unique insurance provider with an internationally recognised brand whose business is underwritten by nearly 90 insurers who accept risk on a shared and competitive basis.

The insurance deal included a cover against political violence where acts of terrorism fall. Mr Tachenberg declined to comment on the matter.

Robert George, the Corporate Intelligence Manager at London-based Chaucer Syndicate Limited — the lead firm in the syndicate that insured Westgate — confirmed the contract. He, however, declined to discuss details of the deal, including who, if any, were its Kenyan partners and what is covered in the package.

“I can confirm that we (Chaucer) did lead the insurance of the centre (Westgate) in Kenya,” said Mr George, on a telephone and mail interview from London.

“Company policy does not permit any further comment at this time,” he said.

The Times of India reported that the mall that was built by Indian construction magnate Lakshman Raghavani and was initially priced at Sh4.2 billion.
Knight Frank, an upmarket property valuer, told the Business Daily that the building could not be sold for less than Sh6.9 billion.
Westgate business owners, some of whom tragically lost staff in the incident, are now counting their losses in one of Nairobi’s most prime locations.

Many had by Wednesday no idea of how much stock they lost in the ensuing battle to rid the complex of the invaders — but were cancelling orders already made.

The clothes store Deacons Kenya had four outlets in the mall — Mr Price Home, Identity, Woolworths and Addidas.

“The four stores accounted for 15-20 per cent of our Kenyan business and, therefore, this is a big blow for us,” said Muchiri Wahome, the managing director, adding that all 40 workers in the stores survived the attack.

“The directors shall sit and map out the way forward when we get clear directions as to how structurally sound the building is. Westgate’s owners are continuously in touch with us but it is still too early to make a decision.”

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