Insurers brace for fresh wave of protest-related claims

By Newsflash Writer

Insurance companies are staring at another spike in claims as property owners and businesses tally losses from looting and destruction linked to protests commemorating the 2024 anti-government demonstrations.

The full extent of the chaos, which unfolded in 27 counties on Wednesday, began to emerge yesterday as traders returned to their premises after staying away to avoid the unrest. In Nairobi’s CBD, shops along Mfangano Street, Moi Avenue, Khoja, and OTC bore the brunt, with many vandalised and emptied of stock.

Last year, CIC General Insurance revealed it paid out Sh400 million in political risk claims. “We did a research on the same last year and of course, there was increased uptake of political risk cover after the demonstrations,” said Association of Kenya Insurers (AKI) CEO Tom Gichuhi.

Some businesses were even set ablaze, highlighting the protests’ intensity. The demonstrations were reportedly infiltrated by criminals and hired gangs, resulting in deaths and numerous injuries, including to law enforcement officers.

This marked the third wave of protests in June, further underlining the vulnerability of the insurance sector to political turbulence.

Retailers, banks and manufacturers count losses

The earlier riots were sparked by the controversial death of teacher and blogger Albert Ojwang in police custody. Public protests have been flagged as key drivers of the rise in claims last year. The recent unrest is expected to pile pressure on insurers due to the growing uptake of policies. General insurers paid out Sh2.52 billion in 2024 under fire industrial policies—where political risk is partially categorized—double the Sh1.27 billion paid in 2023.

Gichuhi noted that firms treat political risk differently: some classify it under a distinct category, while others place it under fire insurance with subcategories like strikes and civil unrest.

Retailers also suffered significant losses, with Naivas outlets in Nyeri and Naivasha looted during the violence that left at least 10 dead and over 400 hospitalised.

The Retail Trade Association of Kenya (Retrak) condemned the attacks, saying the looting damages entrepreneurship, job security, and economic recovery. “We call on security agencies to act swiftly and decisively to protect businesses, hold perpetrators accountable, and restore calm,” Retrak said in a statement. The Kenya Bankers Association (KBA) reported that 30 bank branches and ATMs—including NCBA in Nyeri and National Bank in Embu—were vandalised. “It is the first time that we have seen this attack.

The previous ones were only attempts but not on this scale. We will discuss with the Central Bank of Kenya on how we beef up security in the unlikely event we have such demonstrations in the future,” said KBA CEO Raimond Molenje, adding that the cost of damages was still being calculated. Manufacturers also raised concerns over protest-related disruptions.

“Manufacturers and business entities from various regions have reported significant damages, including looting, vandalism, injury to staff, business disruptions, and destruction of property,” said Kenya Association of Manufacturers CEO Tobias Alando.

“This was perpetrated by individuals whose intent was not to protest but to cause harm. These acts have led to considerable financial losses to all businesses, from micro, small & medium enterprises (MSMEs) to large industries.” Government buildings were not spared either.

Police stations attacked

Interior CS Kipchumba Murkomen said nine police stations were attacked, five of them torched—including those in Dagoretti, Molo, and Ol Kalou. Medical claims are also expected to surge with hundreds of civilians and officers injured. APA Insurance is the provider covering police officers.

Over 10 buildings, including Musa House in the OTC area, were set ablaze, adding to insurers’ burden. Political risk cover, long avoided by insurers, began gaining traction in 2019 when UAP (now Old Mutual) entered the space with limited motor vehicle cover. The sector has since expanded its offerings as demand grows.

Banks, too, are expected to be impacted, as businesses struggle to service loans in the aftermath.

Kenya’s economic outlook remains grim, with non-performing loans now at 17 percent of total credit issued. The volatile political climate threatens to further weaken the already fragile business environment.