Financial Services group UAP Old Mutual has signed a deal with London-based insurer Lloyd’s to cover large-scale infrastructure, mining and construction projects.
The firm is particularly eyeing the extractive sectors including oil, gas and minerals as well as very large scale infrastructure projects such as railways, ports, airports, hydroelectric dams and geothermal plants.
“We are now able to research and provide special insurance covers that are unique to emerging business frontiers for projects that have not been previously covered by standard existing products,” said UAP Old Mutual Group chief executive Peter Mwangi in a statement Wednesday.
The package will cover terrorism and political risk which are gaining prominence in insurance products in the run up to next year’s general election.
Old Mutual has announced a specialty package of up to Sh20 billion ($200 million) for one location underwritten by Lloyd’s.
The UK and South African insurer which acquired UAP insurance has created a Lloyd’s cover holder to write specialty business in sub-Saharan Africa.
“We’re working in partnership with leading Lloyd’s specialty underwriters to enhance our in country capabilities - world-class insurance expertise delivered directly by local teams that have a deep understanding of Africa,” Martin Hudson, chief executive of Old Mutual Specialty Insurance said.
Old Mutual Specialty Insurance will cover nine products: commercial property, energy, construction, political risk and trade credit, mining, kidnap and ransom, terrorism, cargo, transit and delay in start-up and general aviation.
The specialty insurance solutions will be delivered through established Old Mutual insurance businesses in sub-Saharan Africa, including Mutual & Federal, UAP and Old Mutual Nigeria.
Old Mutual Reinsurance (Mauritius) Limited will be taking an additional share of the underwriting risk through a specific reinsurance contract to demonstrate commitment to the long term underwriting integrity of their proposition.
Political risk cover has gained traction in Kenya especially after the 2007 post-poll chaos with the Organisation of the Eastern and Southern Africa Insurers supporting the implementation of a policy allowing insurers to cover risks emanating from political related violence.
Terrorism risk cover has also become a major concern following recent incidences of terror as shopping malls, stores and other businesses involving crowds being targeted by terrorists.