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Ruto-linked Amaco doubles PSV insurance business amid Invesco collapse
Many insurers have been aggressive in revising premiums upwards to reflect the level of risk in the market and dropping comprehensive covers for some models of vehicles deemed too risky.
Africa Merchant Assurance (Amaco), which is partly owned by President William Ruto’s family and associates, more than doubled its commercial public service vehicles (PSVs) insurance market share in the first quarter that ended March 2024, making it the biggest winner on the back of the collapse of two insurers.
The latest disclosures by the Insurance Regulatory Authority (IRA) show that Amaco’s market share in the motor commercial PSV segment jumped to 27.77 percent from 11.4 percent in a similar quarter in 2023. The PSV segment covers motorists and passengers from death, injuries, and vehicle damages resulting from accidents.
The jump, the fastest during the quarter, saw Amaco narrow its gap with the market leader in this class of insurance, Directline Assurance, whose market share fell to 59.79 percent from 64.95 percent.
President Ruto’s family owns 190,000 shares or 15.83 percent of Amaco through Yegen Farms Limited where First Lady Rachel Ruto and daughter Charlene Ruto are listed as shareholders, according to government records as of October 25, 2024.
The family’s latest shareholding is nearly four times the 50,000 shares they held through Yegen in July 2022. Charles Tela Alusala, an accountant who handles the family’s affairs in some of their other companies, holds 130,000 shares or 10.83 percent of Amaco.
Dr Ruto’s business associate and friend Silas Kibet Simwato, who chairs the Digital Health Agency, directly owns 40,600 shares or 3.33 percent in Amaco while his family owns 150,000 shares or 12.5 percent through Vomorono Limited and another 90,000 or 7.5 percent through Joubert & Borman Ltd.
President Ruto, who at one point directly owned 128,000 shares in Amaco, relinquished them to Joubert & Borman Ltd.
Amaco’s gross written premium from motor commercial PSV hit Sh379.91 million at the end of the review period, marking a 2.6 times jump from Sh146.37 million in the preceding similar period.
Apart from eating into the market share of Directline whose gross written premiums fell by 1.9 percent or Sh16 million to Sh818.12 million, Amaco benefited from the absence of Invesco Assurance—another PSV insurer which slipped into statutory management last year, barring it from continuing to underwrite any class of insurance.
Invesco had premiums worth Sh138.5 million or 10.79 percent at the end of March 2023 and closed December of the same year with a market share of 8.15 percent or the third highest, before collapsing in 2024. Another PSV insurer, Invesco Assurance, went into statutory management in December 2023 on the back of defaulting on claims payment.
Amaco’s increased business saw it post Sh90.62 million as underwriting profit from commercial PSVs, being an improvement from a Sh191.56 million loss in the preceding similar quarter.
After Directline and Amaco, other insurers in the commercial PSV cover sector by market share are GA Insurance (6.26 percent), Occidental (3.75 percent), Intra-Africa (1.26 percent), Kenya Orient (0.49 percent), Fidelity Shield (0.41 percent) and Sanlam Kenya (0.27 percent).
The motor vehicle insurance business in Kenya has three classes—motor private for private vehicles, motor commercial for commercial vehicles excluding PSVs, and motor commercial PSV exclusively for vehicles like matatus.
During the review period, the three classes showed improved underwriting results, which refers to the difference between premiums collected and claims paid out.
The general insurers cut their underwriting losses in motor commercial covers by 44 percent to Sh1.16 billion while that of insuring private vehicles was reduced by 18 percent to a loss of Sh331.4 million.
Motor commercial PSV returned an underwriting profit of Sh84.23 million, reversing a Sh471.83 million loss that had been posted in a similar quarter of 2023.
Many insurers have been aggressive in revising premiums upwards to reflect the level of risk in the market and dropping comprehensive covers for some models of vehicles deemed too risky.
There have also been insurers adopting telematics—in-car monitoring devices— to adjust premium rates based on policyholders' mileage and driving habits while others have been demanding cashless fare payments.