Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Ruto-linked Amaco rises to biggest matatu insurer
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.
A firm linked to President William Ruto's family has toppled an insurer majority-owned by media mogul Samuel Kamau (SK) Macharia as the leader of Kenya’s multi-billion public service vehicle (PSV) insurance market.
Africa Merchant Assurance (Amaco), partly owned by President Ruto’s family and close allies, has won business worth billions of shillings in recent years to grow market share to 54.71 percent at the end of March this year from 37.51 percent in December o perch itself at the summit of insuring matatus.
Mr Macharia’s Directline Assurance, which is locked in shareholder wrangles, has seen its stake fall from 47.97 percent to 35.67 percent in the period under review, shows data from the Insurance Regulatory Authority (IRA).
The market shares are based on new business written in the three months to March, signalling a quiet shake-up in Kenya’s multi-billion shilling PSV insurance market.
This marks the first time that Directline, which is partly owned by Mr Macharia and his wife and through Royal Credit Limited, has surrendered the lead.
This signals that President Ruto’s firm is the biggest beneficiary of the market shifts and Directline’s struggles, putting the on and off foes in a head-to-head fight for the PSV business.
Dr Ruto and SK Macharia have often stood on opposite ends of Kenya’s political divide, with the media mogul having backed opposition leader Raila Odinga in the presidential contests.
He backed Mr Odinga against former President Uhuru Kenyatta who was deputised by Mr Ruto. He later backed the opposition leader in his unsuccessful bid for the presidency against President Ruto in 2022.
Analysts link Directline’s market loss to the shareholders’ wrangles in the firm and its fights with the regulator, which was triggered by Mr Macharia’s pronouncement in March 2024 that all workers in the firm are fired and insurance policies are invalid.
This triggered action from the IRA, which, through courts, forced Mr Macharia to stop the campaign that rattled policyholders and Kenya’s insurance market.
Apart from eating into Directline’s stake, Amaco may have also benefited from the near collapse of Invesco Assurance—another PSV insurer which slipped into statutory management last year, barring it from continuing to underwrite any class of insurance.
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.
Dr Ruto, who at one point directly owned 128,000 shares in Amaco, relinquished them to Joubert & Borman Ltd. IRA data shows Amaco, which by the end of 2023 was commanding just 14.95 percent of the commercial PSV premiums, has been gaining market share over the past 15 months to March.
On the other hand, Directline, which had 61.56 percent control as at December 2023, has been shedding dominance. Amaco’s quarterly premiums have jumped 98.9 percent to hit Sh755.61 million as at the end of March this year from Sh379.91 million in a similar quarter last year.
Over the same period, Directline’s premiums from commercial PVS have dropped by 39.8 percent to Sh492.64 million from Sh818.12 million. Directline’s decline has come amid a protracted shareholding row that sucked in the regulator.
Mr Macharia has been claiming that the company’s shareholding was unlawfully altered, leading to battles that at one point saw him withdraw Sh400 million from the insurer before the IRA ordered him to reverse the transaction.
The chip at Directline’s stake has been deepened by a new entrant, Definite Assurance Company Limited—an insurer that is majorly owned by Quiver Lounge & Grill owner Peter Mbugua and Sportpesa Chief Executive Ronald Karauri.
Definite, which was licensed in December 2024 and started operations in January this year, closed the quarter with a market share of 2.35 percent, making it the fourth-highest matatu insurer after GA Insurance (4.1 percent). Other commercial PSV insurers are Intra Africa with a market share of 1.68 percent, Fidelity (0.98 percent), Mayfair (0.53 percent) and Pioneer (0.02 percent).
Amaco’s performance over the past one and half years has made it the biggest winner in a market that has seen the likes of Invesco Assurance and Xplico slip into statutory management due to a pile-up of debts and mounting claims.
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.
Motor vehicle insurance remains problematic for the insurance sector at the underwriting level, according to the IRA data.
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 that is exclusively for PSV vehicles like matatus.
