DP Ruto’s insurance company on the verge of collapse


African Merchant Assurance Company

Even as William Ruto goes round the country dishing millions of shillings in fundraisers, a company associated with him, Africa Merchant Assurance Company is on the verge of collapse.
Employees of the troubled  company have gone for months without pay and at least seven branches have so far been closed for operating at a loss.
It is also emerging that clients and staff plan to petition Insurance Regulatory Authority to investigate what is happening at the politically correct insurance firm that landed lucrative tenders through manipulation during Jubilee first term in power.
Amaco is also linked to the sale of a controversial land running into millions to Kenya Pipeline Company. The matter is under investigation. Managers at the insurance firm’s head office at Nexten Mall along Mombasa Road fear the company’s property will be auctioned due to the mounting debts.
In mid September this year, auctioneers stormed Amaco Nyeri offices and carried away property worth over Sh1 million.
The Nyeri offices located along Gakere Road had been closed due to rent arrears.

Kerugoya senior magistrate Eric Wambo issued orders allowing the applicant, Giant Auctioneers to break into the debtor’s locked offices and attach the proclaimed goods that included furniture and
Initialy, the firm headquarters were at Transnational Bank, Nairobi Central Business District.
The building is associated with former president Daniel arap Moi family who own Transnational Bank.
Although Amaco said the relocation to Nexten Mall was aimed at improving service delivery, insiders reveal that it had to do with rent arrears.
That all is not well is manifested with mass exodus of senior staff.
Kennedy Ambicha who was poached from Madison Insurance to be the chief executive officer left Amaco
in unexplained circumstances only to be replaced by Jonna Tomnno.
Tomnno arrived at the helm from Co-operative Insurance Company. Before he could even settle in the office, Tomnno was been replaced by Elizabeth Koskei as the new CEO. She was earlier based at APA. A marketing manager, a Mr Opisa also left after discovering clients were not interested in investing in the firm due to pending bills and political affiliation. Another lady in charge of claims also left unceremoniously.
Word has it when opposition Nasa called for the boycott of products associated with Jubilee after the controversial presidential results, Amaco was among those hard hit.
Of late, the firm management has resorted to vetting all the visitors with an aim of stopping auctioneers, who they suspect will come knocking anytime.
In the past, auctioneers have descended on the firm to seize its property over mounting debts, but have called off the mission after being promised the same will be settled.
Its debt portfolio stands at a tune of Sh2.5 billion, according to an insider in the firm who was recently shown the door.
Sources says Ruto, who has been expanding his media business, is not keen to come to the financial aid of his company yet he has been splashing money all over the country.
Amaco Insurance Company was formed when Ruto enjoyed State House links during the reign of former president Moi.
It had on its list of clients’ big time government institutions including the military.
Shareholders of the company were listed as Ruto and Joubert and Borman Limited, a company in which Ruto and his wife Rachel own majority shares.
Another shareholder is Silas Kibet Simotwo, a well known wheeler dealer, who is also the board of management chairman.
Amaco insurance chairman handles most of Ruto’s businesses. Apart from being his adviser, Simotwo is also Ruto’s partner in some of his investments.
The insurance firm’s top officials are Elizabeth Koskei as acting chief executive, Lawrence Tanui as general manager and Nancy Khakame as human resource manager.
The fall of the insurance firm is linked to its venture into lifeline-motor vehicle insurance.
At one time, motor vehicle insurance business accounted for about 70 pc of Amaco’s business portfolio.
It is a field other insurers run away from but Amaco felt they were better off because they boasted of being competent and politically well connected.
Abincha at one time boasted that the company had posted a turnover of Sh960 million riding on an asset base of Sh860 million.
The company in unexplained circumstances through what is said to be underground deals paid out Sh12 million to a Malindi based hotel —Palm Tree Club— whose premises was razed down by fire, despite the fact that investigations to the incident had not been completed.
It’s over expansion by opening new offices in Naivasha, Narok, Busia, Kakamega and Bomet, targeting public service vehicle so it prone to fraud claims also led to its collapse.
Amaco is on record reporting a Sh11.7 million after tax loss for the year ended December 31 2017. The firm made a net loss of Sh34.78 million in the year ending 2016.
Although the losses went down by Sh23 million, no profit was made.
The insurer’s net claims went up 14.18pc to Sh1.49 billion in 2016 from Sh1.3 billion the previous year.
Its operating expenses decreased 16.91pc to Sh908.1 million compared to Sh1 billion the previous year.
Amaco’s gross earned premiums fell marginally to Sh2.96 billion in 2017 from Sh2.99 billion a year earlier, while net income also remained flat at Sh2.69 billion compared to Sh2.7 billion a year earlier.
Due to failure to pay motor insurers damages promptly. Amaco’s share of the motor segment dropped significantly to 56pc from a high of 80pc in 2011.To lure motorists, Amaco at one time introduced free vehicle clinics to raise revenue.
Amaco’s struggle to survive comes at time Blueshield Insurance Company, Directline Insurance and Invesco Assurance are unable to settle claims running into Sh1 billion.
Within the firm, it is said, Simotwo using his close connections with the DP is behind the current woes.
In the Palm Tree Club payment, he personally handled the payment and withdraw money running into millions at will. He has a cartel in the claims department he controls. In fact, he is the executive chairman of Amaco with the occupiers of CEO office being just figure heads.
Double SS, as he is fondly referred to in the love life and business circles, word at Amaco is final.
Our source even linked him to employment saga involving female university graduates across Amaco departments some holding portfolios that require experience but do not have.
During the Kibaki era, then Ikolomani MP Bonny Khalwale told parliament that Simotwo had engaged in correspondence with Al Champdany Industries of India about the purchase of two million 90kg jute bags that was to cost Sh153 million.
The tender was for the supply of the bags advertised by the NCPB. Simotwo’s name was also to be sucked in Sh24 billion laptop tender award for schools. He was fronting for a firm associated with Amit Mohindra of the BH Mohindra Company, local agents for the giant refrigerator makers, Haier.