• Tuesday, 25 June 2024
Directline Assurance shuts down operations, terminates all employees

Directline Assurance shuts down operations, terminates all employees

The Directline Assurance Company, which reportedly controls more than 60 per cent of the Kenyan Public Service Vehicles (PSVs) insurance market, has ceased operations.

In a brief statement, Dr SK Macharia, Chairperson of Royal Credit Limited, which owns the insurance company, announced the termination of all Directline's employees. 

He also declared the immediate dissolution of the company's Board of Directors, with Royal Credit Limited set to take over all assets owned by Directline.

According to Macharia, the closure of Directline Assurance Company was prompted by freezing of the company's bank accounts by the Insurance Regulatory Authority (IRA).

Macharia further faulted IRA for failing to take action against the company's former directors whom he accused of mismanaging funds totalling Ksh7 billion.

Following the controversial decision, the company announced the immediate suspension of all insurance services.

The latest development has left the transport industry in dismay the company being the leading motor vehicle insurance company in the country.

Directline joined the Kenyan market in November 2005 as a motor vehicle insurance company.

In the 2022/2023 fiscal year, Directline Company's income stood at Ksh4.1 billion, up frm Ksh3.6 billion the previous year.

The company attributed the profit hike to partnerships with market intermediaries including 3200 agents, 83 brokers and 17 banks.

While announcing its profits earlier this year, the company outlined its ambitious plans to diversify its portfolio of products.

In a bid to transform its operations, in February this year, the company announced its transition to cashless fares in a bid to curb fraudulent claims emanating from injuries to deaths of passengers. 

Share on