Prudential Life sued by ex-manager for Sh308m

In a petition filed at the High Court in Milimani, Mr Christopher Muriuki Kibuchi claims the termination of his agency contract on December 27, 2022 was unlawful, irregular and unprocedural, and should therefore be declared null and void.

The former agency leader is seeking reinstatement to his position or, in the alternative, compensation amounting to Sh298 million in projected earnings and about Sh10 million in general damages for breach of contract.

He argues that the insurer unfairly curtailed his legitimate contractual expectations, causing him substantial financial losses.

Mr Muriuki says in court documents that he was headhunted by the company in 2017 through various inducements and representations before taking up the role.

His responsibilities included recruiting, training and developing insurance agents, supervising agency leaders, meeting production targets, preparing operational reports and overseeing the growth of the agency structure.

The underwriter has denied the claims.

In its response, the company has dismissed Mr Muriuki’s assertion that he was headhunted, maintaining that he was recruited after applying for the position.

The insurer also disputes his claim that the growth of the business was solely attributable to his efforts, arguing that the expansion resulted from the collective work of agents, team leaders and the company’s overall business model and strategy.

The firm further maintains that the contract came to an end at the expiry of the term and that its decision not to renew it was lawful and consistent with the terms of the agreement.

The defendant states that upon expiry of the plaintiff’s contract, and notification that the same would not be renewed, he wrote to the defendant on 14th June, 2023 alleging that his contract was unlawfully terminated, demanding reinstatement and seeking payment of his mortgage arrears.

Mr Muriuki stated that his earnings were entirely performance-based and comprised personal commissions, leadership override commissions and production incentives generated through insurance policies sold by agents under his agency structure.

Mr Muriuki says the agreement described him as an independent contractor operating within the insurer’s agency leadership framework.

The contract was initially set to run for 13 months and would thereafter continue from year to year unless terminated in accordance with its terms.

He claims that when he took over the agency in 2017, it consisted of 78 agents and five leaders. By December 2022, he says, he had expanded it to more than 320 agents and 19 unit leaders, significantly increasing the company’s distribution network.

Mr Muriuki contends that despite the growth, the insurer terminated his contract during the December 2022 holiday period without a valid reason and without giving him sufficient time to respond to the allegations against him.

He says the agency generated more than Sh356 million in annual premium equivalent business between 2018 and 2022, contributing significantly to the company’s growth.

As the agency expanded, he argues, his override commissions also increased through multiple layers of the leadership structure.

His income streams, he says, were tied to long-term insurance business generated by the agency rather than being confined to a single contractual year.

Mr Muriuki adds that he invested substantial time, resources and strategic effort over several years in recruiting, training and developing agents and leadership teams.

“The performance contract created a relational commercial contract characterised by long-term cooperation, progressive incentives, and mutual dependency, thereby importing implied duties of good faith and honest performance,” he said.

Mr Muriuki says the sudden loss of income exposed his family to the threat of losing their home and caused them significant distress.

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