When a shareholder tries to pull Ksh 400 million (about $3.1 million) from an insurer’s accounts, the fallout can ripple through an entire industry. That’s exactly what happened at Directline Assurance, Kenya’s biggest player in public‑service vehicle insurance. The episode began in early June 2024, when media mogul Samuel Macharia—chairman of Royal Credit Limited and a Directline shareholder—attempted a transfer regulators called illegal.
Regulators intervene and the insurer is put under watch
The Insurance Regulatory Authority (IRA) acted fast. Citing a breach of Directline’s licence, the agency secured a court order on June 4 to freeze the transaction. In its filing, the IRA warned that the company had already failed to settle roughly Sh 2 billion in claims as of April, raising red flags about its solvency.
Macharia’s response was dramatic. He announced that Directline would shut its doors immediately, dismissed all staff, dissolved the board and claimed that every company asset was now owned by his other venture, Royal Credit Limited. The proclamation sent shockwaves through Kenya’s matatu ecosystem, where Directline commands an estimated 60‑77 % market share and collected Sh 3.1 billion in premiums in April 2022.
The IRA, however, rejected the closure claim and placed Directline under “heightened surveillance.” The authority emphasized that internal shareholder battles do not invalidate existing policies or the insurer’s duty to honour claims. This stance kept the company technically alive despite Macharia’s aggressive statements.
Legal battles, audits and a fight for the insurers’ future
Later that year, a court in October ordered Macharia to return the withdrawn Ksh 400 million, labeling the transfer unlawful. The ruling was part of a broader legal maelstrom that includes accusations of Sh 7 billion being siphoned off by former directors. Macharia has blamed the regulator for not acting against those ex‑directors, arguing they are responsible for the massive losses.
In January 2025, Directline filed its own lawsuit seeking an injunction to stop Macharia from broadcasting warning ads that paint the insurer as unsafe. The court also mandated a forensic audit of the company’s books. An interim board—comprising representatives from AKM Investments Ltd, Janus Ltd and Royal Media Services Ltd—was appointed to oversee the audit and safeguard policyholders’ interests.
While the audit is underway, the IRA continues to affirm that Directline remains fully licensed and operational. Policyholders are being reminded that their coverage remains valid, and the regulator is monitoring the situation closely to prevent any further erosion of confidence in the matatu insurance market.
The saga illustrates how a single financial maneuver can expose deep‑seated governance issues, trigger regulatory action, and threaten the stability of a sector that underpins daily commuter life across Kenya. As the forensic audit progresses and court orders are enforced, the industry watches closely to see whether Directline can rebuild trust and continue its dominant role, or whether the fallout will create space for new players to step into the void.
