Businesses warned of increased Kenyan risks ahead of March elections

Businesses are being warned to risk manage their exposure in Kenya more closely ahead of next month’s elections.

Experts in the region have said violence seen following the 2007 elections could easily erupt again and are warning of heavy casualties, population displacements, widespread loss of property and a general atmosphere of fear.

Insurance provider Clements Worldwide vice-president of sales Dan Tuman said: “There is a chance that one of Africa’s most stable economies, as the next round of voting approaches, will be on the brink of instability once again, potentially repeating the political and social tumult of the 2007 elections.” 

Tuman added: “Companies could once again suffer from significant losses owing to business interruption. Potential road blockages would cause logistics challenges, either delaying or altogether halting cargo deliveries. A social uprising might also create an unsafe environment for staff, resulting in prolonged absences. And finally and perhaps most worrisome, any resulting political violence would expose facilities and offices to potentially significant property damage.”

Experts are telling companies with an on-the-ground presence in Kenya to re-evaluate their risk management portfolios to protect against business interruption arising from political and social upheaval.

According to the Africa Trade Insurance Agency (ATI), demand for uptake of political risk and terrorism insurance covers by both local and international companies operating in Kenya have gone up by over 50% in the last 12 months.

“Recent events such as the Arab Spring have reinforced the notion that a benign, investor-friendly country today can be tomorrow’s risk hot-spot”, said Tuman. 

“While uncertainty remains, most companies are taking necessary precautions. Preparedness among businesses is a higher priority than ever before, as evidenced by the recent increase in special risk covers. From standard property to political risk to terrorism insurance, organisations are now proactively protecting against financial losses with critical insurance cover,” he concluded.