Westgate attack to cost insurers over Sh10bn in claims

Monday, December 16, 2013

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Insurance claims arising from the Westgate Mall terror attack in Nairobi are expected to surpass Sh10 billion, an amount equivalent to a third of the total industry payout for last year, the insurance sector regulator has estimated.

In a report released last week, the Insurance Regulatory Authority (IRA) says the Westgate Mall had an insurance cover of Sh6.7 billion to cover for property damage and business interruption.

Claims from individual business tenants who lost stock and shoppers’ personal property including motor vehicles is, however, expected to increase the total payout.

“The Association of Kenyan Insurers is in the process of collating all the claims data with the aim of establishing the full and final financial cost to insurers. Experts are speculating that the attack could carry a bill way over Sh10 billion in total,” said IRA in an industry report.

MORE THAN 50 BUSINESSES

The September 21 attack by suspected al-Shabaab terrorists on the mall resulted in deaths of more than 70 people, hundreds were injured, while billions of shillings worth of property was destroyed.

The shopping mall was primarily insured by Kenindia Insurance and re-insured by Lloyd’s of London and the African Trade Insurance Agency (ATI).

The part Israeli-owned complex hosted more than 50 businesses including anchor tenant Nakumatt Supermarkets, banks such as Barclays, DTB and CFC as well as restaurants, jewellery and clothes shops.

Shop owners had not assessed the extent of their losses by the time of publishing the report as the mall was only handed back to the owners three weeks ago after government agencies spent more than two months collecting evidence at the site.

It is owned by Sony Holdings whose directors are Alex Trachtenberg of Israeli origin and Vaishali Madan, a Kenyan.

Lloyd’s will absorb most of the Sh6.7 billion loss, with ATI and a number of local insurers also paying millions of shillings to settle the property and business interruption claim, Africa Trade Insurance Agency CEO George Otieno had told the Business Daily in an earlier interview.

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