Kenya Re half-year profit up 6 per cent on new business

Kenya: Kenya Re-insurance Corporation has recorded a six per cent growth in pre-tax profit for the six months ended June 30. However, shareholders will miss out on a windfall after directors declined to recommend payment of interim dividend.

The corporation’s profit before tax climbed to Sh1.72 billion from Sh1.62 billion in a similar period last year. Managing Director Jadiah Mwarania, said the improved performance was as a result of implementing the firm’s strategic goals. Mr Mwarania said the corporation would strive to be innovative to deal with new risks that continue to emerge in the insurance market.

“We have made efforts to diversify our products to cater for emerging reinsurance needs and capitalise on new opportunities,” Mwarania told an investor briefing in Nairobi yesterday. The corporation’s gross premium written for the six months to June 30, grew by 22 per cent to Sh4.91 billion from Sh4.03 billion in a similar period last year driven by aggressive marketing in the international market where there is bigger growth opportunities.

Investment income increased nine per cent to Sh1.33 billion from Sh1.22 billion with returns accruing mostly from equity, treasury bonds and higher yielding government bonds. Claims incurred grew by 36 per cent to Sh2.11 billion from Sh1.55 billion due to severity claims in the first half of the year.

Similarly, commission expenses grew 32 per cent to Sh1.26 billion from Sh962 million in line with growth in premium written.

Overall operating expenses, however, fell by 19 per cent to Sh414 million from Sh513 million due to the provision of Sh82 million recorded in the first half of 2013 resulting from Kenya Revenue Authority assessment on past taxes.