14 Riverside owners to get Sh400m insurance payout

Owners of the 14 Riverside business complex are set to get a Sh400 million insurance payout for losses incurred in the January 15 terror attack that left 21 people dead.

The compensation will cover property damage and loss of earnings for the entire 14 Riverside shopping complex, including the DusitD2 Hotel.

The high-end business complex had taken a terrorist attack cover with GA Insurance.

“We also cover loss of profit, and sometimes profit loss is bigger than your material damage loss,” said GA Insurance chief executive Vijay Srivastava in an interview.

“Physical loss may not be that big, but then after closure of the hotel for six, nine or more months – we don’t know yet – that will add to the amount of loss because we had also covered against loss of profit.”

14 Riverside houses hospitality, media, retail and other businesses, including the global DusitD2 Hotel chain. Re-opening of the hotel, earlier set for June, has been pushed to August, according to information on the hotel’s website. The hotel however is still taking bookings and reservations.

The management of the Thailand-headquartered hotel had in February said it will be “introducing new dining concepts” when the facility re-opens. The re-opening was to be preceded by “a series of community events”.

The deadly attack on the complex, for which Al-Shabaab claimed responsibility, also left dozens injured, besides disrupting businesses at the complex. Most of the businesses have since resumed operations in the six buildings that housed about 40 local and international companies. Among the businesses that have re-opened are Gen Africa, Red House Group, Vitality Clinic, Regus, Qatar Airways and I&M Bank. Others are Pernod Ricard, Commission on Revenue Allocation, SAP, Safari Trails, LJA and AC Nielsen.

Once it is made, the payment to DusitD2 will take GA’s claims arising from property insurance to nearly Sh1 billion.

The insurer is also facing claims from Leopard Beach Resort in Diani at the Coast which caught fire on February 10, destroying two of the hotel’s cottages. The hotel had to evacuate about 200 guests during the fire incident whose costs were estimated to run into millions of shillings.

GA is also assessing claims from Kisumu-based Jumbo Foam Mattress Industries which caught fire in April 2018, paralysing factory operations. The fire was second in recent years after another incident which occurred on December 23, 2014.

Mr Srivastava projected claims from Leopard Beach and Jumbo Foam to range between Sh200 million and Sh300 each.

“Claims settlement is our responsibility, it’s our business. Our business is not just to collect premiums,” he said. “If you don’t have consistent performance in settling claims, you will be out of business very soon.”

Industry statistics by Insurance Regulatory Authority (IRA) show that GA last December had the largest market share in industrial fire with 10.26 percent of the premiums in that class.

“Property insurance constitutes about 21 percent of our portfolio, which is higher than industry’s average of 11 percent,” Mr Srivastava said.