Direct Line Assurance owned by billionaire Dr SK Macharia has reportedly shut down operations.
The company that reportedly controls more than 60 per cent of the Kenya Public Service (PSVs) insurance market stopped offering services on Monday, June 10, terminating all employee contracts. READ FULL STORY
This was communicated by Dr Macharia through a brief statement declaring the immediate dissolution of the company’s Board of Directors, stating that the Royal Credit Limited in which he is chairperson would be taking over all assets owned by Directline.
The dissolution was ascribed to ongoing struggles with the Insurance Regulatory Authority (IRA) which have led to the freezing of the company’s bank accounts.
Macharia in his statement further put the regulatory authority on the spot for its failure to take action against the company’s former directors whom he accused of financially mismanaging Kshs 7 billion, leading to the suspension of all insurance services.
The most recent development has caused significant concern within the transportation sector, with the company being the top motor vehicle insurance provider in Kenya.
As per IRA data, Directline held Ksh1.66 billion in gross premiums from commercial PSV covers as of June 30, 2023, securing a market share of 60.79 per cent in the market.
Directline which joined the Kenyan market in November 2005, has a workforce of 1000 employees and has 24 branches countrywide, and in the 2022/2023 fiscal year, annual gross turnover stood at Kshs 4.26 billion.
The company offers a wide range of products in motor vehicle insurance, personal accident insurance, domestic insurance and industrial insurance.
Directline attributes its success to partnerships with market intermediaries including 3200 agents, 83 brokers and 17 brokers.
