What you need to know:
- He has weathered the storm as he captained his multi-stocked business ship, staring at bankruptcy three times and having his property auctioned twice.
- His woes started in 2016 when the legal regime concerning the management of the insurance business changed from Human Share Capital to Risk-Based Regulations.
He is a daring moneybag with an eye for the good things in life. He is the quintessential billionaire (well, at least in terms of assets as he says), the proverbial pauper to a prince who built everything by the sweat on his brow.
He made his first million when he was just 24-years-old. Only, six years later, it was all gone, and he was left servicing a Sh1 million loan. Life has not always been smooth sailing.
He has weathered the storm as he captained his multi-stocked business ship, staring at bankruptcy three times and having his property auctioned twice.
Mr Peter Kenneth Nduati had been to the mountain top, then everything careened off the rails. Recently, Resolution Insurance, the company he founded, was placed under receivership.
A chartered insurer and economics graduate, he raised Sh40 million in capital from family and two angel investors to bankroll his idea of the insurance firm.
He founded Resolution Insurance Company in 2002. The company obtained a licence from the regulator a year later and to divest from the business by taking liquidity, he sold the business and was left with 15 percent shareholding while 5 percent remained under a trust.
Turnover for the first year was $1 million from 3,000 members and topped $3 million in the second year. Growth averaged 50 percent annually until 2008 when post-election violence pushed the company into the red.
It changed its name to Resolution Insurance in 2013 as it expanded into the region, a time when Mr Nduati sold his business. The company was initially a medical insurance provider, operating as both an insurer and broker, taking premiums for the less risky outpatient services and reinsuring the risky in-patient business with local insurers.
The majority shareholders of the business requested him to stay on as a director and to take care of stakeholder management as the group chief executive officer.
What made Resolution Health so successful? He said it targeted an under-served market at the time – women. Resolution Health provided products needed by women and children – gynaecological care, maternity care, HIV/Aids, among others.
The serial entrepreneur was brought up in Dagoretti by a single mother in a family of six. On his social media accounts, he dots himself as an “eclectic entrepreneur with diverse interests: founder and director Resolution Group; chairman of True Blaq Group and Pine Creek Records.”
Before having a successful business, he had four failed businesses. The first was a hair salon, the second a grooming service for news anchors.
The third business to flop was in real estate and the fourth was a marketing company called Consumer Benchmark.
As the insurer stares at trouble, is this yet another lesson in entrepreneurship for the father-of-four?
Start of woes
His woes started in 2016 when the legal regime concerning the management of the insurance business changed from Human Share Capital to Risk-Based Regulations.
As such, based on the Insurance Regulatory Authority’s assessment the Kenyan Resolution Insurance and the Tanzanian Resolution Insurance companies were established to be deficient in capital adequacy.
Following the assessment, a majority of the shareholders took the position that they would not inject any capital into the business for reasons they were owned by a fund and the fund was closed and no drawings could be realised.
In July 2020, in a meeting attended by Mr Nduati and other shareholders, the regulator took the position that its primary concern was to see that capital is injected into the business and parties agreed.
Mr Nduati blames investors for failing to inject the much need money.
The insurer made an underwriting loss of Sh457 million in 2021. There have been cases where Kenyans insured with the company have been sent away from medical institutions or asked to pay in cash for services offered, then seek compensation with Resolution Insurance.
On March 30, the company’s offices were swept clean by auctioneers.
Policyholders will be paid Sh250,000 each after it was placed under the care of the Policyholders Compensation Fund.
This story was first published on the Business Daily