Digital enforcement of local marine cargo insurance for all imports in Kenya: Strategic opportunities and challenges

A directive in Kenya has renewed efforts to fix enforcement gaps of the obligation of securing local marine cargo insurance after the 2025 enforcement initiative weakened due to technical system hurdles. The renewal efforts have been made successful through the creation of a digital platform aimed at enforcing the requirement of securing local insurance for marine cargo. The digital enforcement presents strategic opportunities for the Kenyan insurance industry as well as various challenges.

In 2025, the Kenya Revenue Authority (KRA) and the Insurance Regulatory Authority (IRA) jointly issued a notice directing all importers to obtain local marine cargo insurance prior to obtaining customs clearance. This directive was to take effect from 14 February 2025. It was aimed at ensuring compliance with amendments to the Finance Act, 2017. The Finance Act had amended the Marine Insurance Act to insert Section 16A which mandates persons with insurable interest in marine cargo to obtain marine cargo insurance with a locally registered insurer. Further, and to support Kenya’s insurance industry, Section 20(4) of the Insurance Act makes it an offence to take out insurance from an unlicensed insurer. The notice indicated that importers were required to digitally procure the marine cargo insurance and which resultant insurance certificate from the IRA platform would be submitted to KRA’s digital platform known as the Integrated Customs Management System (ICMS). 

Further to our insights on the above developments on ‘Changes in Kenya’s local marine cargo insurance: a game changer or a trade barrier?’ published on 13 May 2025, we now provide recent developments on marine cargo insurance in Kenya. On 22 May 2026, IRA in ensuring compliance with Section 16A of the Marine Insurance Act as well as Section 20(4) of the Insurance Act issued a notice on enforcement of local marine cargo insurance for all imports. Treasury had directed IRA to collaborate with KRA and Kenya’s telecommunication giant Safaricom PLC to work towards creation of a digital platform, whose intention was to integrate directly into KRA’s ICMS. This directive by the Treasury was also aimed in ensuring adherence to the aforementioned provisions of the Insurance Act and Marine Insurance Act. 

IRA has now announced that the digital platform has now been fully developed. All importers shall be required to digitally secure marine cargo insurance cover for their imports from licensed insurers, before obtaining customs clearance - effective 1 July 2026. In its directive of 22 May 2026, IRA also stated that a request for a digital marine cargo insurance certificate will be made through an insurer’s portal or other portals connected to the IRA’s platform and the e-Citizen payment channel. Thereafter, the processed digital marine certificate and confirmation of payment of the requisite premiums will be digitally submitted to KRA’s ICMS.

Digital enforcement: A Strategic opportunity for marine insurance in Kenya?

The digitization of enforcement of marine cargo insurance in Kenya aligns with the global trend towards ensuring seamless trade facilitation. IRA’s directive on digitizing enforcement of local marine cargo insurance presents a strategic opportunity for the growth of marine insurance in Kenya.

The main advantage associated with this digitization is the acceleration of verification making compliance by importers possibly inevitable, because data is digitally exchanged in real time between IRA, the insurer, e-Citizen as well as KRA. The administrative burden is also significantly reduced since physical paperwork is also eliminated. 

IRA is set to gain increased visibility into the compliance level with the obligation of all importers to obtain local marine cargo insurance cover. Additionally, the directive by IRA presents an opportunity to yield defined and significant market data regarding import volumes of marine cargo, data which may inform better regulatory supervision and system maintenance. Transparency across the marine cargo import chain is also improved; IRA, insurers and importers can access consistent transactional records. 

Digitization of enforcement offers a strategic opportunity for Kenya to expand its local insurance sector and consequently, reshape Kenya’s economy positively. Ultimately, increased marine cargo volume is expected to translate into higher premiums and revenue for local insurance companies. 

Challenges: Is Kenya ready to maintain digital enforcement on local marine cargo insurance?

Notwithstanding the strategic opportunities presented by IRA’s directive, there are several doubts on the effectiveness of the digital platform. One of the challenges emerging is that the digital nature of the enforcement could increase chances of cyber security risks. In July 2023, Kenya’s e-Citizen platform faced a high-profile cyber-attack which in turn affected several services hosted under it. Being a critical infrastructure which is also vital in the enforcement of the obligation of obtaining local marine cargo insurance, any technical hitch, crash, delay or cyber-attack may in turn have a bearing effect on customs clearance and potential effect of leaving urgent marine cargo stranded despite payment already being made by the importer. 

An irrefutable reality is that technology by its very nature remains characteristically susceptible to systemic glitches. It remains to be seen how IRA will reduce or eliminate technical hitches in obtaining customs clearance and the digital marine cargo insurance certificate. The new digital platform requires constant backend development and synchronization of all digital systems to enable exchange of information in real-time.

Together, these technical challenges raise questions as to the effectiveness of the digital enforcement platform.

Conclusion

The consequential impact of IRA’s directive is expected to drive Kenya’s marine insurance sector forward. With digital enforcement expected to take force effective 1 July 2026, the instant reality is that no enormous digital migration is completely resistant to technical drawbacks. The impact of digital enforcement by IRA, however, remains to be felt – will it be a strategic opportunity for Kenya’s marine insurance sector or will it present greater technical challenges? Follow our article series as we delve into these developments in insurance, navigate complexities and explore potential solutions.