Directline Assurance has taken legal action against businessman Samuel Kamau (SK) Macharia, seeking to stop him from running cautionary adverts that warn the public against dealing with the insurer.
The company claims the ads contain “reckless and false statements,” particularly asserting that its insurance covers are invalid. This legal move is expected to escalate tensions between Directline’s management and Mr Macharia, a major shareholder in the company.
According to Directline, the adverts have caused significant financial damage, including a drop in revenue, and have sparked unnecessary panic in the Public Service Vehicle (PSV) insurance market, where Directline holds a dominant 60 percent market share. The insurer argues that these ads are undermining its credibility and customer base.
“…it is in the interests of justice that this court intervene,” said Directline in a court filing dated January 7. The case will be heard again on January 22 for further directions.
The conflict centers around claims made by Mr Macharia, who, through his stake in Directline via Royal Credit, has been publicly calling for a boycott of the insurer.
He asserts that the company’s insurance policies are “invalid” due to alleged illegal changes to its share registry.
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However, the Insurance Regulatory Authority (IRA) has rebutted these claims. The IRA insists that Directline remains a fully registered and licensed insurer, and that all policies issued by the company are “in full force and effect.”
“All insurance policies issued by Directline remain in full force and effect. Policyholders are assured that their contracts remain valid, and the insurer is fully liable for any claims arising therefrom,” said IRA CEO Godfrey Kiptum on December 23, 2024.
The conflict between the parties will likely escalate, disrupting the PSV insurance market, where rivals such as Africa Merchant Assurance (Amaco) are gaining ground.
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