NAIROBI, 23 July 2015 –Nearly two years ago, the Westgate Mall was the scene of one of the worst terrorist attacks in Kenya’s history. The Somalia-based terror group Al-Shabaab took responsibility for the 67 lives lost, claiming it to be retaliation for Kenya’s military operations in Somalia. That dark moment in Kenya’s history has now been transformed with the recent reopening of Westgate Mall.
Meanwhile, behind the scenes, the African Trade Insurance Agency (ATI) and other local insurers in partnership with Lloyd’s of London Syndicates played a big role in rebuilding the mall, which for many now stands as a symbol of resilience and hope.
With hindsight, Sony Holdings, the owners of Westgate, showed tremendous foresight when, at the outset, they chose to take out a policy covering the property against potential terrorist attacks. At that time, ATI mobilized reinsurance support from the international market- and issued a comprehensive terrorism & sabotage insurance policy covering the building against property damage and business interruption.
As a result of the terror attack, in recent months, a substantial initial interim pay out to Sony by reinsurers has significantly eased the financial burden of rebuilding the mall. A further payment on account by reinsurers is also expected to be released shortly.
“This type of insurance cover is not just about the dollar or shilling value a client is able to recoup after damages. More importantly, it sends a powerful signal to investors and financiers that you represent a secure investment. In the case of Westgate, the insurance cover allowed the owners to attract additional funding, ultimately helping them to rebuild,” notes George Otieno, ATI’s Chief Executive Officer.
While the bulk of the reinsurance support came from international partners in the Lloyd’s of London insurance market, ATI, as the local representative, was able to mobilize these partners, increase the local insurance capacity and in the process, set a record for the highest claim paid by an insurer for a single risk episode in the Kenyan market.
ATI’s strong financial position is expected to provide a solid base for paying out increasing amounts of claims. “As an insurer’s profitability and business increases, it is normal that the level of claims will also rise. What sets apart a successful insurer is their ability to pay. I believe that ATI is now reaching this threshold,” adds Mr Otieno.
ATI’s 2014 results, released in June, showed the company had achieved a record $1.3 billion gross exposure and a 130% increase in profits with a $180 million capital base.
