This archive report was first published on 21 November 2019.
On November 21, 2019, Global Credit Rating (GCR) announced that it had upgraded Kenya Reinsurance's rating following a review of its methods of measuring insurance firms.
The South African ratings firm moved the reinsurer from AA national scale to AA+ with a stable outlook and from BB with a negative outlook in the international scale to B+ with a stable outlook.
According to GCR, the upgrade was a result of the company's efforts to strengthen its risk-adjusted capitalisation and liquidity.
Kenya Reinsurance Managing Director Jadiah Mwarania has been at the helm of the company, guiding it through a challenging period marked by a 36 per cent decline in net profits from Sh3.5 billion in 2017 to Sh2.2 billion.
Despite the decline, the company's sound investment income from its sizeable investment portfolio is expected to maintain solvency strength over the rating period.
State guarantees Kenya Re compulsory premiums of 18 per cent in Kenya, which contributes to half of the company's income.
However, GCR warned that the company may face a negative rating if revenues continue to decline, offsetting the impact of prudent underwriting policies.
