Forced to Buy, Left to Hope: Kenya's Importers Need Insurers That Can Actually PayForced to Buy, Left to Hope: Kenya's Importers Need Insurers That Can Actually Pay

The Kenya Revenue Authority will block customs clearance for uninsured imports unless a digital certificate has been issued and sent to its customs system first. The principle is sound. The problem is the pool of insurers importers are being herded into, and a regulator that has let some of its weakest members keep selling cover for years.

A government that forces you to buy must first make sure the seller can pay.

A 2017 law finally gets teeth at the port

The rule is not new. The Finance Act 2017 added Section 16A to the Marine Insurance Act, requiring anyone with an insurable interest in imported cargo to insure it with a locally registered insurer. For years importers ignored it, often buying cover abroad as part of the price of the goods.

What changes now is enforcement. The Insurance Regulatory Authority's digital cargo cover procedure ties each certificate to an import declaration, checks the premium against IRA-approved rates and transmits it to the customs system. No certificate, no clearance.

Every importer of phones, fertiliser, spare parts, medicines and fabric is now a captive customer of the Kenyan insurance industry.

We accept the case for the rule. Premiums paid at home stay at home, build local underwriting capacity and save the country foreign exchange. Clearing agents and several insurers have spent months building the platform, and Kenya should not abandon a law Parliament passed nine years ago.

The IRA's own record on weak insurers

The difficulty is that compulsion changes who carries the risk. When a trader chooses a foreign underwriter and it fails, that was the trader's bet. When the state says only a Kenyan-licensed insurer will do, the state is vouching for every name on that list.

The regulator's recent record does not inspire that confidence. On 10 March 2026, the IRA placed Trident Insurance, Corporate Insurance and KUSCCO Mutual Assurance under statutory management after they failed to meet solvency requirements, and barred them from writing new business.

Seven months later, the Policyholders Compensation Fund, their statutory manager, is still freezing payments to policyholders and claimants; it extended that moratorium by two months from 10 September.

Then there is Directline Assurance. It ended June 2026 with liabilities of KSh 9.68B ($74.57M) against assets of KSh 7.08B ($54.54M), leaving Directline's negative equity at KSh 2.60B ($20.03M), while creditors pursue liquidation in several courts.

It has been under the IRA's heightened surveillance since June 2024, yet Kenya's biggest matatu insurer still writes 43.41% of that market's premiums and kept growing its share this year.

The IRA itself left seven insurers out of the quarterly industry report it released in July because they had not filed mandatory returns. One of them, Definite Assurance, holds about a quarter of the matatu cover market. A regulator that cannot get returns from a licensed insurer cannot tell importers whether that insurer will pay a cargo claim.

KSh 500,000 against a container of goods

The safety net behind a failed insurer is thin. The Policyholders Compensation Fund pays at most KSh 500,000 ($3,850) on a claim. On Mwenendo's arithmetic, a trader whose container of electronics worth KSh 6.5M ($50,050) is lost at sea, and whose insurer then collapses, would recover less than 8% of the value from the fund.

That is the hidden cost of compulsion. A small importer in Gikomba or Eastleigh has no risk department and no way to read an insurer's balance sheet. If the platform offers a weak insurer next to a strong one at the same IRA-approved rate, the trader has every reason to pick whichever certificate comes fastest, and no reason to suspect the state's own system would list an insurer that cannot pay.

Rates raise a second concern. The IRA says each premium is checked against approved rates, but those rates are not easy for an ordinary importer to find. When a market is created by law, its prices should be public before the law is enforced, not after.

Four demands before the port gate shuts

We call on the Insurance Regulatory Authority to publish, by 31 October, the full list of insurers authorised to issue certificates on the digital cargo platform, with each one's latest solvency position. Any insurer under statutory management, below the minimum capital requirement or late with its returns should be off that list on 1 November.

We call on the IRA to publish the approved marine cargo premium rates by the same date, in plain language, so that a trader in Mombasa can see what a KSh 1M ($7,700) consignment should cost to insure.

We call on the Kenya Revenue Authority to state publicly, before 1 November, that importers will not pay storage or demurrage charges when the certificate system, rather than the trader, causes a delay. The platform runs through eCitizen, and a system failure must not become a fine on the people forced to use it.

And we call on the IRA to decide Directline's future before the Malindi High Court hears the latest liquidation petition on 23 November. Two years of surveillance is long enough to reach a conclusion.

The law asks importers to trust Kenyan insurers. That trust has to be earned by the regulator first, and the deadline for earning it is the same day the port gate shuts.