A Feasibility Study of the Insurance (Motor Vehicles Third Party Risks) (Amendment) Bill 2010 and its Impact on Kenya’s Insurance Industry

The insurance industry in Kenya is faced by several challenges that make its operation strenuous. In this paper I intend to tackle; (1) the legislative challenges, where the laws set by parliament to govern the insurance industry have not responded to its needs. (2) The jurisprudential challenges, where the courts award arbitrary damages especially with regard to public service vehicle insurance. It is these changes in the industry that make this research necessary especially considering the fact that the insurance business in Kenya is quite promising as stated in the Kenya Insurance Report Q4 2010. Kenya provides evidence that the insurance industry can thrive in Sub-Saharan Africa in face of highly challenging economic and especially political problems. At the end of 2008, combined assets of Kenya’s 42 insurers amounted to KES 46.12bn, or nearly US$2bn. Both the non life and life segments sustained double digit growth over the last five years. One does not need to make aggressive or radical assumptions to produce a scenario where the double digit growth continues through the forecast period. I thus seek to analyze the applicability of these changes in the current legal framework and seek to forge a way forward for Kenya’s insurance industry.