Kenya is poised to retain billions of shillings previously lost to foreign insurance markets following the government's decision to enforce mandatory local marine cargo insurance for all imports beginning July 1, 2026.

The Insurance Regulatory Authority (IRA) has confirmed that all systems are ready for the rollout of the new framework, which requires importers to obtain Marine Cargo Insurance (MCI) from insurers licensed in Kenya before clearing goods through customs.

The move marks one of the most significant reforms in the country's insurance and maritime sectors, targeting a long-standing practice where imported goods destined for Kenya are insured by foreign underwriters, resulting in substantial premium outflows from the local economy.

According to Treasury Cabinet Secretary John Mbadi, the directive is aimed at strengthening the local insurance industry, increasing insurance penetration and ensuring that value generated through international trade remains within Kenya.

"For many years, marine cargo insurance premiums associated with Kenyan imports have largely been ceded to foreign insurers despite the goods being destined for the Kenyan market," Mbadi said while presenting the 2026/27 Budget Statement.

Industry estimates indicate that Kenya loses over Ksh 70 billion annually in marine insurance premiums to international underwriters through Cost, Insurance and Freight (CIF) import arrangements. Under this system, foreign suppliers arrange insurance cover in their home countries, denying Kenyan insurers access to a lucrative line of business.

The enforcement of Section 16A of the Insurance Act seeks to reverse this trend by requiring all marine cargo insurance for imports into Kenya to be placed with locally licensed insurers.

To facilitate compliance, IRA, working with the National Treasury, the Kenya Revenue Authority (KRA) and Safaricom PLC, has developed a fully integrated digital platform that links insurers, the eCitizen payment gateway and KRA's Integrated Customs Management System (ICMS).

Under the new system, importers will purchase marine cargo insurance digitally through insurers, brokers and agents connected to the platform. Digital insurance certificates will then be issued against active Import Declaration Forms (IDFs) and transmitted electronically to KRA, allowing customs clearance to proceed seamlessly.

For the local insurance industry, the benefits are expected to be substantial. Retaining marine insurance premiums within the country will increase premium income, strengthen insurers' balance sheets and enhance the industry's capacity to underwrite larger and more complex risks.

For IRA, the new framework will improve regulatory oversight and market visibility. The Authority will have access to real-time data on marine insurance transactions, enabling more effective supervision, enhanced consumer protection and better enforcement of insurance laws.

Importers are also expected to benefit. Local insurers will provide faster claims handling, easier access to customer support and greater regulatory protection under Kenyan law. The digitized process is expected to reduce delays and simplify compliance requirements during customs clearance.

The initiative has also received support from regional maritime stakeholders over the years. The Maritime Organization of Eastern, Southern and Northern Africa (MOESNA) has consistently advocated for the retention of maritime-related services within member states, including marine insurance, ship agency services and maritime financing.

MOESNA has previously argued that African countries lose significant revenue through the export of maritime services to foreign markets despite handling growing volumes of international trade.

The organization has encouraged member states to strengthen legal and institutional frameworks that enable local companies to participate more effectively in the maritime value chain.