Competition Authority of Kenya says 10 insurance companies under probe

The Competition Authority of Kenya (CAK) says it is monitoring the conduct of 13 institutions following a series of complaints raised by consumers.

Among those being monitored are 10 underwriters and three retail sector players, whom the authority says are now under the microscope over their business conduct.

This is according to CAK Board Chair Shaka Kariuki, who said the authority has saved the consumer over Ksh.10 billion in the last five years.

Mr. Kariuki said the strict enforcement of competition laws has seen them intervene in cases that would have cost the consumer more.

Speaking during the launch of the International Competition Network Convention in Nairobi, he noted that the authority will not relent in its efforts, adding that it is critical for them to ensure all players are playing by the rules.

“We’ve saved the consumer who’s our ultimate shareholder almost Ksh.10 billion. You look, for example, in the cement industry that was savings of about Ksh.4.6 billion...at the paint industry that was a billion shillings...SME space it was close to Ksh.3 billion and of course through other situations that we have intervened in,” he stated.

The authority now says it has its eyes set on buyer power and they are now monitoring 10 underwriters and three retailers.

According to CAK, they have received complaints from suppliers over contractual obligations, particularly delayed payment from the retail players, while complaints from the insurance sector include cases of underwriters who do not fulfil their obligation despite the consumers raising the issue.

CAK Acting MD Adano Roba stated: “Retail sector is an area of concern for us...those are sectors under buyer power where the buyer has relations between the supplier and a buyer and therefore what are the conducts that will require to be enforced by the authority? If you look at the concerns, we are only talking about areas that have come to our attention and therefore we have taken action or are in the process of gathering evidenc.”

“I want to encourage all market participants to ensure that they’re playing within the rules...that’s what I’d communicate to all market participants regardless of the industry they are in,” added Mr. Kariuki.

The warning from the CAK comes on the backdrop of a Ksh.1.1 billion fine imposed on Majid Al Futtaim, the operator of Carrefour’s supermarket franchise in Kenya in December last year, a decision that the retail chain has since appealed.

CAK further said it will continue cracking the whip to ensure fair competition in the market saying it discourages investment and disadvantages the consumer.