This archive report was first published on 8 October 2019.
Kenya Re Eyes Regional Market to Drive Growth ¶
Kenya Re, the state-owned reinsurance company, is marking its 50th anniversary next year amidst challenges in the local and regional markets. Managing Director Jadiah Mwarania discussed the company's strategy to navigate the competitive environment and expand its operations across the region in an interview with Financial Standard on October 8, 2019.
The insurance sector has been performing poorly in recent years, with low profits and high loss ratios in key classes of business. Mwarania attributed this to intense competition, which has led to price undercutting and risks not being priced appropriately. This has resulted in a contraction of premiums and slower growth.
Kenya Re is also facing the expiration of compulsory cessions under the insurance laws next year, which will impact the company's income. However, Mwarania stated that the company has strategies in place to deal with this and may lobby the State for an extension, as has been the practice since the 1970s.
The company is also looking to expand its footprint outside Kenya, with plans to set up a subsidiary in Uganda in response to regulations on domestication of business. This is part of a broader strategy to increase its presence in the region and grow its market share in countries such as Ethiopia, Nigeria, Ghana, and Zambia.
Technology has transformed the daily operations of Kenya Re, with innovations such as insurance aggregators that help users compare rates for different product classes. However, Mwarania noted that there are also regulatory challenges affecting the business, including a lapse in regulatory oversight for products such as marine insurance.
