SK Macharia Shuts Down Directline Assurance Company & Fires All Employees
Macharia attributed the shutdown to the closure of all the bank accounts belonging to Directline by the Insurance Regulatory Authority (IRA).
Edith Stacy 
Following an announcement by Royal Credit Limited on Monday, June 10, 2024, Kenyan insurance giant Directline Assurance, holding the "lion's share" of the motor commercial Public Service Vehicle (PSV) market, has ceased operations.
Royal Credit Chairman S.K. Macharia announced in a statement that all employees have been terminated effective immediately and the board of directors has been dissolved. Directline will also cease "issuing insurance."
Macharia attributed the shutdown to the closure of all the bank accounts belonging to Directline by the Insurance Regulatory Authority (IRA).
The Insurance Regulatory Authority signage. /IRA
However, he accused the IRA of failing to take action against former Directline directors who he alleges misused Ksh7 billion Kenyan of company funds.
Consumers Federation of Kenya (COFEK) Secretary General Stephen Mutoro linked the closure to the anticipated economic hardship predicted by the Finance Bill 2024.
He highlighted the negative impact on policyholders, stating that individuals with insurance coverage from the company will be unable to make claims after the closure.
“S.K Macharia’s Directline insurance has abruptly closed its operations and rendered all staff jobless. All those seeking claims will have no means of securing the same.
"Direct Line was the PSV sector market leader.it reportedly closed due to the tough economic times presented by the Finance Bill 2024,” Mutoro stated on X.
Directline's troubles began in 2019 when S.K. Macharia declared himself chairman and director, prompting the Insurance Regulatory Authority (IRA) to caution Macharia and other shareholders to stop any physical involvement in the operations of the company immediately.
Macharia took over operations, claiming Royal Media Services (RMS), Royal Credit Limited, himself, his wife Purity Macharia, and the estate of the late Dan Karobia were the majority shareholders.
He appealed a court decision in 2023 that restricted his involvement in company management. However, the court revealed that Macharia only held a 9.6 percent stake through Royal Media Services, while 90 percent belonged to his late son, John Gichia Macharia.
Macharia blamed the company's downfall on the misappropriation of over Ksh7 billion by former directors, which he claims the IRA failed to address adequately. Consequently, employees were terminated immediately and assets will be taken over by Royal Credit Limited.
Directline Assurance's closure significantly impacts the insurance landscape, leaving policyholders and stakeholders in a state of uncertainty.
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.
