CIC Insurance has announced that it is now offering covers for the extractive sector which includes mining, oil and gas industry players.
Extractive refers to processes that involve the extraction of raw materials from the earth to be used by consumers. The extractive industry consists of any operations that remove mineral and aggregates from the earth.
Speaking during the 12th Annual Association of Insurance Brokers in Kenya (AIBK) Conference at a Kwale hotel, Joseph Kamiri, CIC Insurance Group General Manager for Marketing and Distribution said that the firm had decided to venture into the nascent industry strategically as it continues to open up and attract more local players.
“Extractive businesses such as mining, oil and gas drilling are high capital investment ventures and only a few international firms are able to get into it since costs associated with prospecting in mining for instance are considered sunken costs if no minerals are found,” said Kamiri.
He noted that CIC had invested in the technical capacity, including industry experts in the team and formed the necessary global reinsurance linkages that are useful to providing the mining insurance cover. CIC envisages the industry players suffering losses from disruptions due to varied factors. When production and supply chain points are affected, interruptions can often be lengthy and significant leading to unforeseen losses that need to be covered.
The CIC Mining Insurance solution, said Kamiri, also addresses the needs of other support providers including staff resourcing, vehicle leasing, movement of raw materials and machinery. This extends to construction companies setting up structures that accommodate staff and to security providers, making the solutions holistic for the whole mining and extractive sector ecosystem.
In rolling out the solution, CIC has developed an insurance all risks cover that provides comprehensive cover for the companies involved in the extraction business. “Our solution focuses on all mobile assets, and can cover all machinery and equipment either above ground and underground. We are also carrying out workshops, training the providers in the relevant risk elements of their businesses and participating in industry fora to enhance awareness about this critical solution for firms operating in Kenya,” said Kamiri.
Kenya, he added, is now looking forward to effective regulation and structure of the mining sector following the recent enactment of the Mining Act. The law provides for a structure in the way the industry will be regulated and defines the expectations of all players. With these developments, and the fact that more resources are being discovered, CIC expects the industry to reach the expected Ksh 100 billion annual value estimated by the ministry of Mining within a few years.
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“CIC is now firmly positioned to offer mining industry cover that is reinsured in partnership with reputed global firms such as Lloyds of London for any of the variable risks that local players face,” he said, adding that this was a key driver of its product innovation pipeline. The reinsurer has a wealth of experience in the mining sector and a proven track record of working with African partners to deliver benefits across the continent.
Kamiri revealed that CIC has over the past couple of years, invested in operationalizing its specialty insurance division with a primary focus on emerging industries and sectors that require carefully designed and packaged insurance risk covers.
