Kenyan companies take up political risk insurance ahead of the General Election

NAIROBI, Kenya, Jan 12 – Kenyan companies  are worried over risks and damage that may arise from the 2022 General Election and are increasingly looking to insure themselves against the political risk 

Apollo Group Chief Executive Ashok Shah says there has been an increase already in inquiries and purchase of the package as uncertainty looms over the electioneering period.

“We’re definitely seeing an increase in inquiries and purchases of political risk insurance. There certainly is increased demand,” Ashok told Capital Business.

Political Violence and Terrorism cover (PVT)can cover physical assets like a manufacturing facility or goods in storage or currency movements in the event of a loss due to political decisions or conditions.

“For companies, the major concerns are property damage and business interruption cover if any violence erupts they are also increasingly looking to consider coverage for terrorism liability,” he added.

Under political risk, companies are mainly seeking to protect themselves against adverse and unpredictable political decisions — including the nationalization of businesses and foreign exchange controls that are associated with regime change.

Kenya’s next General Election will be on August 9, 2022. The poll is expected to bring in new leadership and a different form of governance, raising the country’s political risk profile.

Political risk cover became popular following the 2007 post-election violence that saw over 1,500 people dead and between 400,000 and 600,000 were internally displaced.

 Effects of the violence and displacement were particularly severe in Western Kenya, the Rift Valley, and amongst business owners in major cities including Nairobi, Kisumu, Eldoret, Nakuru and Naivasha.

The crisis had various immediate humanitarian implications and high economic costs,  people lost jobs and were excluded from their livelihoods, and suffered secondary effects of economic slowdown.

“In the hope of a peaceful election, it is paramount for businesses to take precautions,” he concluded.