This archive report was first published on 3 August 2019.
Kenya Re, a regional reinsurer, reported a 12.5% decline in its half-year profit for the period ending June 30, 2019, due to increased insurance claims and costs.
The reinsurer's net profit dropped from Sh1.23 billion in the same period last year to Sh1.08 billion. This decline was attributed to a 49% increase in net claims, which rose from Sh3.3 billion to Sh4.9 billion, as well as a 23% jump in operational expenses, from Sh6.5 billion to Sh8 billion.
Managing Director Jadiah Mwarania noted that the firm paid significant claims, including Sh42 million for the Ethiopian Airlines plane crash and Sh44 million for the Dusit terror attack. Additionally, Kenya Re paid Sh44 million in claims for floods in Asian countries.
Mwarania also highlighted the unfavourable investment climate in the region, which has affected the reinsurer's business in markets such as Uganda and Egypt. He stated that the regulations in Egypt required a favourable rating and higher paid-up share capital, which impacted the firm's operations.
However, Mwarania expressed optimism, stating that the firm is back to business and expects to earn up to Sh300 million in written premiums. The reinsurer is also looking to set up regional offices in countries such as Uganda to protect its business.
Despite the challenges, Kenya Re reported a 40% growth in gross written premiums, from Sh6.3 billion to Sh8.8 billion. Investment income also grew by 2%, from Sh1.90 billion to Sh1.94 billion, attributed to improved yields from government securities and fixed deposits.
