Key Points:
- Kenyan businessman Samuel Macharia announced the immediate closure of Directline Assurance due to frozen accounts by the Insurance Regulatory Authority.
- Macharia’s Royal Credit Limited takes over Directline assets after IRA freezes accounts, terminating employees and dissolving the board.
- Directline’s closure follows ambitious growth plans, highlighted by partnerships and a cashless fare transition.
Kenyan businessman Samuel Macharia, chairman of Royal Credit Limited, announced the immediate closure of Directline Assurance Company, a leading motor vehicle insurance provider in Kenya. The decision follows the Insurance Regulatory Authority’s (IRA) freezing of the company’s bank accounts.
Macharia attributed the collapse to the misappropriation of over Ksh7 billion ($54.1 million) by former directors, a situation he claims the IRA failed to adequately address. In a brief statement, Macharia also announced the termination of all employees and the dissolution of Directline’s Board of Directors. Royal Credit Limited will take control of all Directline’s assets.
Major player in the insurance sector
Since entering the market in November 2005, Directline Assurance has been a significant player in Kenya’s insurance sector, particularly noted for its motor insurance offerings.
For the 2022/2023 fiscal year, the company reported an income of Ksh4.1 billion ($31.6 million), up from Ksh3.6 billion ($27.8 million) the previous year. This growth was driven by partnerships with 3,200 agents, 83 brokers, and 17 banks.
Earlier this year, Directline had outlined ambitious plans to diversify its product portfolio while reporting its profits. In February, the company transitioned to cashless fares to reduce fraudulent claims related to passenger injuries and deaths under Macharia’s leadership.
Samuel Macharia’s media and insurance influence
Samuel Macharia, one of Kenya’s richest individuals, is a leading shareholder in Directline Assurance, which operates as a key insurer in Kenya and the wider East Africa region.
He is also the founder and chair of Royal Media Services, the largest private radio and TV network in East Africa, which includes Citizen TV and Radio Citizen, cementing his influence in Kenya’s media landscape.
In 2021, Kenya’s Director of Public Prosecutions, Noordin Haji, petitioned for the dismissal of Macharia’s court case against 14 directors of Directline over the alleged fraudulent transfer of shares and cash amounting to Ksh4 billion ($36.3 million).
This petition highlighted the ownership battle of Directline Assurance, with conflicting ownership records disclosed by Macharia and the IRA.