Ruto-linked insurer cedes PSV ground to Karauri, SK Macharia

The drop comes as rival firms grew their premiums at a faster rate, triggering market shifts that saw Definite Assurance Company, the newest insurer targeting PSVs, emerge as the biggest beneficiary.

Mr Karauri, who is also the Member of Parliament for Kasarani, has a minority stake in Definite Assurance, which, in less than nine months after its entry, has grabbed a 7.71 percent market share from 2.35 percent in March.

The firm, which launched operations in January last year, is backed by moneyed shareholders including Quiver Lounge owner Peter Mbugua and Kushian Muchiri, who for years managed Kenya Mpya buses that ply the Nairobi-Thika route.

The shifts froze Amaco’s aggressive market share gain, which saw its stake of premiums from the matatu industry double to 54.7 percent in March last year from 27.7 percent in the same month in 2024.

Directline, which is locked in shareholder wrangles, also gained market share with a 39.5 percent stake in September from 35.67 percent in March, according to data from the Insurance Regulatory Authority (IRA).

It was the market leader with a 60.6 percent stake in September 2024 before Amaco rose to the helm in March last year.

The loss of market share in 2024 marked the first time that Directline, which is partly owned by Mr Macharia and his wife directly and through Royal Credit, saw its stake drop below 50 percent since the IRA started disclosing PSV as a separate insurance line. Mr Macharia also owns Royal Media Services.

Analysts link Directline’s market loss to the shareholders' wrangles in the firm and its fights with the regulator, which was triggered by SK Macharia’s pronouncement in March 2024 that all workers in the firm were fired and insurance policies invalid.

Mr Macharia had, for several months, run cautionary adverts claiming that any insurance cover issued by the company was “invalid” due to “illegal” alteration of the share registry.

This triggered action from the IRA, which through courts forced Mr Macharia to stop the campaign that rattled policyholders and Kenya’s insurance market.

Directline, however, enjoyed relative calm after months of shareholding rows. Its market loss in the year to June last year allowed Amaco and Definite Assurance to use pricing, business connections and aggressive marketing in the PSV market to gain market share.

The two firms have also benefited from the collapse of Invesco Assurance—another PSV insurer which slipped into statutory management in 2024, barring it from continuing to underwrite any class of insurance.

Invesco had a 10.79 percent stake of the PSV market at the end of March 2023. It went into statutory management on the back of defaulting on claims payment.

Isaac Ngaru, an insurance sector expert with Ngaru and Associates, said the business is a low-hanging fruit for investors since there are few players and there is no pressure to market.

However, he says the premiums are “grossly underpriced,” making the business unsustainable in the long run.

“The model almost looks like a Ponzi scheme. Investors come in and collect billions of shillings in premiums before claims catch up with them. It is a game of musical chairs that eventually leaves some players without chairs when the music eventually stops,” he said.

“PSV premiums are grossly underpriced. No insurance company is charging the requisite premium when you consider the risks in this class of insurance. It may take up to a 50 percent rise in premiums for this business to be sustainable.”

Amaco's rise emerged after a period that saw the insurer get locked in several court cases that prompted auctioneers to move in for its assets amid cases of defaulting on claims.

Business Registration Services (BRS) records showed President Ruto’s family held 190,000 shares or 15.83 percent of Amaco through Yegen Farms Limited, where First Lady Rachel Ruto and daughter Charlene Ruto were listed as shareholders as of October 25, 2024.

The first family’s latest shareholding in Amaco is nearly four times the 50,000 shares it held through Yegen by 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.
The most striking growth, however, has come from newcomer Definite Assurance.

The firm, which entered the PSV underwriting space in January 2025 with aggressive pricing and fresh capital, has steadily expanded its footprint—from 2.35 percent market share in March 2025 to 4.74 percent in June and 7.71 percent by September.

Mr Mbugua and Mr Karauri were key in the formation of the insurer as key financial backers.

Mr Muchiri was brought on board because of his network in the matatu business, which he gained from years of managing Kenya Mpya buses that ply the Nairobi-Thika route.

Matatus are the focus of Definite Assurance, which is seeking to exploit the gap left with the collapse of Invesco Assurance and Xplico—top players in the segment that generate premiums of nearly Sh6 billion annually.

Mr Mbugua is said to have made his money in the alcohol business, starting small to morph into Quiver Lounge bar chain that has recently become a household name in Nairobi's nightlife scene, with bars in Kilimani, Kitengela and Eastlands as well as on Thika Superhighway and Mombasa Road.

Mr Karauri made his money in Pevans East Africa, which pioneered betting in the country with the SportPesa brand.
Pevans paid Sh7.6 billion in dividends in the four and a half years to June 2019, creating new billionaires and expanding the fortunes of owners like Mr Karauri, who also doubled as CEO.

For years, insurers have treated matatus as the industry’s problem child, with many viewing it as accident-prone, heavy on litigation and notoriously hard to price.

In the year ended December 2024, underwriting losses from insuring private vehicles widened to Sh3.06 billion from Sh2.6 billion as the loss from commercial vehicles improved slightly to Sh3.04 billion from Sh3.3 billion.

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