Kenya Reinsurance half-year profits increase 20pc to Sh1.5 billion

Kenya Reinsurance (Kenya-Re) has posted a 20 per cent growth in net profits for the six months to June on the back of an increase in its premiums business.

The reinsurer said it made Sh1.5 billion in after-tax profit, up from Sh1.24 billion recorded over a similar period last year. Its gross written premiums increased to 26.5 per cent to Sh6.2 billion, up from Sh4.9 billion.

“This growth was achieved due to aggressive marketing efforts in international markets, where there are bigger growth opportunities,” said Jadiah Mwarania, the company’s chief executive. The listed company’s investment income also grew by six per cent to Sh1.43 billion, up from Sh1.33 billion, supported by capital gains from equity instruments and interest from fixed-income instruments and rent.

Chosen markets

Mr Mwarania attributed the company’s performance to efficient claims management, product innovation and aggressive marketing. “We ensured consistency in service delivery and maintained strong partnerships with the insurance industry across chosen markets,” he said.

He also announced that the corporation plans to establish a subsidiary in Lusaka, Zambia, to enhance service delivery in southern African markets were at an advanced stage. The proposed subsidiary is expected to serve Zimbabwe, Zambia, Botswana, Lesotho, Namibia, Mozambique and Swaziland.

This, he added, would be in addition to Kenya-Re’s subsidiary in Abidjan, Ivory Coast, which serves western African markets.

The reinsurer is not recommended any interim dividend to its shareholders. Its shares, however, are currently trading at Sh17.40 per unit, up 6.42 per cent in the last week.

Going forward, the company, which offers reinsurance services to insurance companies in Africa, the Middle East and Asia, expects to see re-takaful premium growth, especially with the growing Muslim population in its target markets. "With the increased uptake of takaful in the markets we operate in, we expect to see re-takaful premium growth especially with the growing Muslim population coupled with interest in the product by non-Muslims," he said.

Re-Takaful, an alternative to conventional reinsurance, which has been picking up of late, is an Islamic insurance concept founded on the co-operative principle where policyholders pool resources to help each other in times of need.

Religious law

Under this regime, funds and operations of shareholders are separated from those of policyholders in tandem with Sharia, Islamic religious law which advocates for individuals to co-operate and protect each other.

The corporation, Mwarania disclosed is also working to create capacity and expertise into oil and gas (energy) in the country.

"This includes our marine and energy retrocession protection for inward treaty and facultative acceptance. It also includes skills development in technical areas of energy reinsurance business," he added.