By Benadeta Mwaura - Reporter
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Kenya, April 23, 2026 - Kenya’s marine insurance sector is showing signs of strain, with growth slowing to its lowest level in years, exposing deep structural weaknesses in the enforcement and implementation of existing laws meant to protect local underwriters.
At the centre of the slowdown is a long-standing regulatory gap. Despite a legal requirement that all imports into Kenya be insured by locally licensed firms, a rule anchored in amendments to the Insurance Act and Marine Insurance Act, compliance has remained inconsistent.
Industry data shows that while premiums have grown over time, they remain disproportionately low compared to the value of goods entering the country.
According to the Insurance Regulatory Authority, marine and transit insurance premiums stood at about KSh4.41 billion in 2023, a modest 5.2 percent increase from the previous year. This growth, however, pales in comparison to Kenya’s import bill, which reached approximately KSh2.61 trillion in the same period.
This mismatch highlights a fundamental problem: a significant portion of imports are still being insured offshore, effectively denying Kenyan insurers access to a lucrative segment of the market.
Industry players have consistently pointed to weak enforcement as the primary constraint. Even after the government reiterated the requirement that all imported cargo must have local marine insurance cover before clearance, implementation has lagged.
In many cases, imports continue to enter the country with foreign insurance policies, undermining domestic underwriters.
The situation has persisted despite renewed efforts by regulators and tax authorities. In early 2025, the Kenya Revenue Authority and the Insurance Regulatory Authority issued a joint directive mandating strict compliance, requiring importers to procure marine insurance locally before customs clearance.
While the move was expected to unlock billions in premiums for Kenyan firms, delays in system rollout and enforcement challenges have slowed its impact.
Technical glitches, including delays in integrating digital certification systems, further complicated implementation, pushing back timelines and weakening momentum.
Beyond enforcement, structural issues within the insurance sector itself have also contributed to the slowdown.
Some local insurers continue to cede significant portions of risk to foreign reinsurers rather than building domestic capacity. Others have been criticised for insufficient market education, leaving importers unaware of the legal requirement or the benefits of local cover.
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The result is a sector that remains underdeveloped relative to its potential, despite Kenya’s strategic position as a regional trade hub.
The stakes are high. Marine insurance plays a critical role in facilitating trade by protecting goods against risks such as loss, theft, and damage during transit. It also provides assurance to financiers, enabling businesses to access credit and expand operations.
With the Port of Mombasa handling record cargo volumes, over 41 million tonnes in 2024, analysts argue that the marine insurance market should be significantly larger than it currently is.
Instead, the sector’s growth has lagged behind trade expansion, suggesting that policy intent has not fully translated into market reality.
Experts warn that unless enforcement is strengthened and systemic inefficiencies addressed, Kenya risks continuing to lose marine insurance business to foreign markets.
This not only deprives local insurers of revenue but also limits the broader economic benefits that come with a robust domestic insurance industry.
There are also concerns about competitiveness. As global trade becomes more complex and risk-sensitive, the ability of local insurers to provide comprehensive and reliable marine cover will be critical in supporting Kenya’s position as a logistics and trade hub in East and Central Africa.
For now, the data tells a clear story: the legal framework exists, the market opportunity is vast, but execution remains the missing link.
Until that gap is closed, the promise of marine insurance as a driver of economic growth will remain largely unrealised.