Kenya Re chief executive Jadiah Mwarania. PHOTO | SALATON NJAU
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Data from the Insurance Regulatory Authority (IRA) shows the market share of Kenya Re in the general insurance business came down from 70.9 per cent in December for general business, having collected Sh1.4 billion in premiums by the end of March.
Kenya Re, however, dismissed the IRA report pointing out that its business had grown as indicated by increase in overall premiums.
Listed reinsurer Kenya Re’s market share for general business shrank by 18 percentage points to 53 per cent in the first three months of the year, data from the Insurance Regulatory Authority (IRA) shows.
According to IRA, the market share of Kenya Re in the general insurance business came down from 70.9 per cent in December for general business, having collected Sh1.4 billion in premiums by the end of March.
In life business its portion of the market reduced to 36.4 per cent from 68.8 per cent over the same three-month period during which it realised Sh116.8 million in premiums.
Increased business flowed towards the privately owned East African Re, which became the largest player in reinsurance of long-term or life business.
East African Re more than doubled its market share in life reinsurance business to 58.8 per cent from 26.6 per cent three months earlier. In general reinsurance, East Africa Re’s market share increased to 35.2 per cent from 20.6 per cent in December.
Kenya Re, however, dismissed the IRA report pointing out that its business had grown as indicated by increase in overall premiums.
“I don’t agree with that. At the beginning of the year each reinsurer will lose certain treaties and gain some and in our case we gained more than we lost,” said Kenya Re chief executive Jadiah Mwarania.
Kenya Re is the largest reinsurer in the country with insurance companies mandated to cede 20 per cent of their reinsurance business to the Nairobi Securities Exchange-listed firm. The government owns 60 per cent of Kenya Re.
IRA used the total premium collection by the reinsurance companies to determine their market share.
“The information contained in this report has been extracted from the quarterly unaudited returns submitted to the authority,” reads part of the report published by the regulatory body.
The reinsurance companies reported an 8.3 per cent drop in total premium collections to Sh2.94 billion from Sh3.2 billion reported in quarter one of last year.
Continental Re was the third ranked reinsurer which also registered growing market share in general business to 11.4 per cent from 8.4 per cent.
However, there are five licensed reinsurance companies in the country with the others being Zep Re and Africa Re. Zep-Re, which is owned by the 19 countries that make up the Common Market for Eastern and Southern Africa (Comesa), enjoys a 10 per cent cession while Africa Re, owned by all 53 African states, gets five per cent compulsory fees.
Including Kenya Re’s 20 per cent, this means only 65 per cent of the business is left open to competition.
East African Re is owned by several private insurers with companies linked to the deep-pocketed Philip Ndegwa family being majority shareholders.
First Chartered Securities and ICEA insurance, both majority owned by the Ndegwas, own 25 per cent each of the reinsurance company. Other companies with a stake in East African Re are Kenindia Assurance, GA Insurance, Cannon Assurance, Gateway and Apollo Investments.
The company recapitalised Sh300 million of its profits this year through a bonus share of three units for every 10 held.
The capital injection is expected to help the company support additional business with expectations of robust growth in insurance sector driven by a growing middle class and the nascent oil, gas and mining sector.
The insurance sector has been growing at a fast pace with industry data indicating the gross premiums rose by 16.4 per cent during the first quarter of the year.
Kenya Re has been eyeing the regional market, expanding its international business with conversion of west African region office in Abidjan, Ivory Coast, to a subsidiary last year.
The reinsurer is also targeting the southern Africa market with Zambia, Zimbabwe, Mozambique and Botswana in its sights.
Regional expansion has seen the contribution of its overseas business grow to 46 per cent of the total in 2013 from 38 per cent five years earlier.
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Note: The results are not exact but very close to the actual.
