The Intergovernmental Standing Committee on Shipping (ISCOS), is spearheading marine Cargo insurance initiative in all the member states.
The shipping agency is currently focusing on East and Southern African countries to make shippers buy marine insurance in their respective countries.
Already Kenya is setting the pace, with the Insurance Act requiring that all imports are insured by Kenyan underwriters.
The regional shipping agency was formed by the four states (Kenya, Tanzania, Uganda and Zambia) in 1967 to perform various functions on their behalf such as negotiation on freight rates, fighting against unjustifiable surcharge and other charges on seaborne cargo.
Kenneth Mwige is the ISCOS secretary general. We have already held meetings with the Pensions and Insurance Authority of Zambia, the Insurance Association of Zambia (IAZ), the Uganda Insurance Association, the Zambia Shippers Council (ZSC), the Uganda Shippers Council (USC) and the Tanzania Shippers Council (TSC).
“The policy directive from ISCOS’ coordination committee gives it impetus to drive to on-shore MCI in the region. The projected savings and retention of hard currency in ISCOS member states’ economies runs into several hundred million dollars every year for the region.”
ISCOS will meet again with Zambia’s stakeholders early December in Lusaka, and is expected that action will be taken by the government of Zambia, which is a major exporter of raw materials as well as being a major importer of finished goods.
Records at ISCOS indicate that Burundi, Congo, Kenya, Rwanda, Tanzania, Uganda, Malawi and Zambia, exported insurance premiums on marine worth $ 4.89 billion between 2009 and 2013.
Mwige, “Almost $5 billion in only one electoral cycle donated by warm, kind and generous Africans to appreciative, graceful and eternally friendly foreigners. Uganda has also complained of huge premium revenue ceded to foreign marine underwriters. Data compiled by Uganda Insurers Association last year showed that the latter have received an estimated $335 million in the past four years.”
The Insurance Act 2011 states that all exporters and importers are required to procure marine insurance with local companies, but various agencies particularly the Insurance Regulatory Authority and Uganda Revenue Authority have not been aggressive in enforcing this law, Mwige says.
There is no restriction on a country to enact laws to protect its domestic insurance industry.