Westgate attack to cost insurers over Sh10bn in claims

The Westgate Shopping Mall. Photo/EMMA NZIOKA  NATION MEDIA GROUP

By GEORGE NGIGI


IN SUMMARY
The Insurance Regulatory Authority (IRA) says the Westgate Mall had an insurance cover of Sh6.7 billion to cover for property damage and business interruption. This could however rise to over Sh10 billion

The shopping mall was primarily insured by Kenindia Insurance and re-insured by Lloyd’s of London and the African Trade Insurance Agency (ATI)
The mall is owned by Sony Holdings whose directors are Alex Trachtenberg of Israeli origin and Vaishali Madan, a Kenyan
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Insurance claims arising from the Westgate Mall terror attack in Nairobi are expected to surpass Sh10 billion, an amount equivalent to a third of the total industry payout for last year, the insurance sector regulator has estimated.

In a report released last week, the Insurance Regulatory Authority (IRA) says the Westgate Mall had an insurance cover of Sh6.7 billion to cover for property damage and business interruption.

Claims from individual business tenants who lost stock and shoppers’ personal property including motor vehicles is, however, expected to increase the total payout.

“The Association of Kenyan Insurers is in the process of collating all the claims data with the aim of establishing the full and final financial cost to insurers. Experts are speculating that the attack could carry a bill way over Sh10 billion in total,” said IRA in an industry report.

The September 21 attack by suspected Al-Shaabab terrorists on the mall resulted in deaths of more than 70 people, hundreds were injured, while billions of shillings worth of property was destroyed.

The shopping mall was primarily insured by Kenindia Insurance and re-insured by Lloyd’s of London and the African Trade Insurance Agency (ATI).

The part Israeli-owned complex hosted more than 50 businesses including anchor tenant Nakumatt Supermarkets, banks such as Barclays, DTB and CFC as well as restaurants, jewellery and clothes shops.

Shop owners had not assessed the extent of their losses by the time of publishing the report as the mall was only handed back to the owners three weeks ago after government agencies spent more than two months collecting evidence at the site.

It is owned by Sony Holdings whose directors are Alex Trachtenberg of Israeli origin and Vaishali Madan, a Kenyan.

Nakumatt managing director Atul Shah told a parliamentary committee investigating the terror act that stock lost at the supermarket was valued at Sh1.6 billion in addition to three vehicles that got burnt.

He said the supermarket was insured against acts of terrorism, for 60 per cent of the total cover.

Electronics store, Dixons which occupied 1,000 square feet of the mall had stock of between Sh12 and Sh13 million, said its chairman Mukhtar Parkar.

Clothings store Deacons Kenya had four outlets in the mall — Mr Price Home, Identity, Woolworths and Addidas — which the management said accounted for 15-20 per cent of its Kenyan business.

Lloyd’s will absorb most of the Sh6.7 billion loss, with ATI and a number of local insurers also paying millions of shillings to settle the property and business interruption claim, Africa Trade Insurance Agency CEO George Otieno had told the Business Daily in an earlier interview.

Insurers had initially warned that most of the victims, especially car owners whose vehicles were destroyed at the mall risked bearing the loss for not having insurance covers that extended to acts of terror.