SK Macharia-Owned Directline Cautions Motorists Against Purchasing Policies

Directline Assurance Company, linked to Royal Media Services owner SK Macharia, on Saturday, December 28, cautioned prospective clients against purchasing insurance policies from the company.

In an advertisement run by its parent company Royal Credit Limited which assumed control over the company after its dissolution, the company warned Kenyans against conducting the aforementioned business and also informed that it would not be making any financial payouts to claimants. 

“Royal Credit Limited cautions against any purchase of insurance policy from Directline (Assurance Company),” the advertisement read.

The advertisement seemingly contradicted a previous notice issued by Directline on December 21 stating that efforts toward claims settlements were in progress and moving well. Directline informed claimants that from December 2023 to December 2024, the company had successfully paid Ksh2.8 billion in claims with over Ksh190 million paid between 1st to 18th December 2024. 

Before its dissolution in June 2024, Directline reportedly controlled more than 60 per cent of the Kenyan Public Service Vehicles (PSVs) insurance market. The dissolution led to a mass lay-off as the contracts of all its employees were terminated.

The dissolution was communicated by the Chair of Royal Credit Limited SK Macharia, which owned the insurance company, and was also notified of the immediate dissolution of Directline’s Board of Directors with Royal Credit taking over all its assets.

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

Additionally, in the brief statement confirming the dissolution, Macharia faulted the IRA for failing to take action against the company’s former directors whom he accused of mismanaging funds totaling Ksh7 billion.

IRA in response termed the move by Macharia to dissolve the company as null and void. The development triggered a squabble between SK Macharia and the IRA with a back-and-forth ensuing with both parties laying blame on the other over the company’s woes.

IRA argued that it was the only body mandated with the responsibility of approving, suspending, or canceling the operations of any insurance company in Kenya.

The dispute between Directline and the IRA unearthed an ownership wrangle that revealed the rot at Directline with Macharia through his lawyer Dunstan Omari moving to court claiming that Directline was grabbed from him and forcefully taken over by other persons who harbored an interest in the insurance company and its prospects.

Directline joined the Kenyan market in November 2005 as a motor vehicle insurance company and gradually rose to obtain the largest market share in the PSV insurance sector.