Lloyd's reinsurance broker MNK Re has set up a Kenyan subsidiary to comply with law changes that required foreign brokers to establish a local presence.
MNK Re appointed Steven Oluoch as Chief Executive of its new Kenya and East Africa office and said it will be targeting specialty business in aviation, maritime, energy, financial lines and real estate.
Mr Oluoch said setting up in Kenya was undertaken in compliance with the change in law but also offers the broker an opportunity to expand in the region and handle specialty businesses that are not currently on offer.
The Insurance Regulatory Authority (IRA) moved to change the law to protect local players who use foreign brokers to buy re-insurance products.
The regulator said some local insurance firms using foreign brokers send money abroad and when something happens they come back to IRA.
“We are here to complement what some of you do, to use our expertise and networks to link you with global insurance partners and not to take away anyone’s business. We offer bespoke solutions and specialty brokerage addressing some of the areas that are currently not being covered,” Mr Oluoch said during the company launch last week.
The Finance Act 2021 amended the Insurance Act to provide for the regulation of foreign reinsurance brokers by amending the definition of brokers which previously excluded the brokers who are not resident in Kenya.
The IRA issued a circular calling on all reinsurance brokers that have operations in the country to set up a physical office in Kenya and get license from the regulator.
Reinsurance also known as insurance for insurers, is the practice whereby insurers transfer portions of their risk portfolios to other parties to reduce the likelihood of paying a large obligation resulting from a claim.
Most of the foreign brokers operate from the United Kingdom, India and South Africa.
The regulation of Re-insurance brokers is likely to enhance the IRA’s supervision of insurance industry players.
The Finance Act 2021 has also amended the Insurance Act to remove the requirement to have the Kenya Reinsurance Corporation certify reinsurance contracts.
The Government of Kenya owns 60 percent of the company which also competes with other re-insurers in the market.