By James Anyanzwa
Kenya Reinsurance Corporation’s pre-tax profit rose 45 per cent during the year ended December 31, 2012. The Re-insurer’s profit before tax grew to Sh2.94 billion from the previous year’s Sh2.03 billion.
It was buoyed by increased investment income, which jumped 86 per cent to Sh2.65 billion from Sh1.42 billion in a similar period. The growth in investment income is attributed to strong performance of the equities portfolio, the high interest rate environment enjoyed for most of 2012 and realisation of gains from a property sale during the year.
Managing Director Jadiah Mwarania attributed the positive performance to good business from insurance intermediaries.
According to the Company’s audited financial statements gross premium written grew by 20 per cent to Sh7.94 billion mainly as a result of overall insurance premium growth in the country and the rest of Africa where the corporation derives the bulk of its revenues.
The increase in gross premiums was mainly fuelled by medical and workman’s compensation claims. Claims incurred grew by 38 per cent to Sh4.06 billion largely explained by severity in claims experience during the year. Shareholders’ funds improved to Sh14.61 billion from Sh11.52 billion
The Re-insurer also attributed the profits to a favourable interest rate environment and good returns from treasury bills, bonds, bank deposits and the stock market.
Directors proposed a dividend payout of 40 cents per share pending approval by its shareholders during the annual general meeting set for June 7.
“The amount payable under (work injury benefits Act) was raised and this has increased liability to the insurance companies and also there has been rising industrial accidents,” said Mwarania.
Operating expenses increased by 40 per cent to Sh1.08 billion from Sh773 million.
Kenya Re is also keen on opening up a representative office in Southern Africa to tap into life business from Zimbabwe, Zambia, Mozambique and Botswana, after these countries’ HIV prevalence rates improved.
