African Countries in Political Unrest Cover Deal

Two insurance entities have come together for Political Unrest Cover Deal Political risk insurance cover will cover political violence and terrorism in african countries

In a deal worth more than $384.6 million, two insurance entities have come together to offer cover against political violence, sabotage risks and terrorism in Eastern and Southern Africa.

South Africa is currently the only country on the continent where insurance companies cover political unrest risks.

Jubilee Insurance and the African Trade Insurance Agency will partner to offer these services, which have traditionally been shunned by insurance companies in Africa, due to the high risk factor.

The General Manager of Jubilee Insurance, Patrick Tumbo Nyamemba said: "Under the facility for political violence, terrorism and sabotage protection that was signed earlier in the year, Jubilee Insurance has expanded its product line by retaining these specialist political risks, which it previously passed onto reinsurers outside the Kenyan market."

"Political risk cover will cushion the region's vast agricultural resources, the energy sector as well as the financial sector," he continued. "With this cover, our clients will get a favorable rating by lending institutions and as a result, they can negotiate for better financing terms."

The two companies will cover businesses operation in Kenya, Tanzania, Uganda, Mauritius and Burundi. Kenya is expected to generate the most revenue.

"It is not clear what the economic climate in the region will look like once the current financial crisis passes," said Nyamemba. "All we can focus on is our preparedness as a region to meet the future challenges. We project that the demand from companies for insurance protection will increase."