Kenya Re-insurance headquarters along Aga Khan Walk in Nairobi. PHOTO | FILE
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AM Best said the score was influenced by Kenya Re’s growth in revenues and posting profits in the first half of the year.
US rating agency AM Best has maintained a stable rating for Kenya Reinsurance Company (Kenya Re) meaning the reinsurer is in a strong position to pay claims.
AM Best assigned Kenya Re’s financial strength a B+ (Good) rating and a “bbb” rating for the listed firm’s credit strength. The outlook for both ratings is stable.
The rating agency said the score was influenced by Kenya Re’s growth in revenues and posting profits in the first half of the year.
“During the first six months of the year, Kenya Re’s operating performance was stable, and the loss ratio during the period was broadly unchanged when compared with the same period in 2014. Going forward, AM Best expects the company to continue to grow its business whilst maintaining adequate risk-adjusted capitalisation and stable underwriting performance.” Kenya Re’s total half-year income stood at Sh6.15 billion, an 11 per cent increase from Sh5.52 billion generated in a similar period in 2014.
Net profits however slightly reduced by two per cent to stand at Sh1.17 billion from Sh1.19 billion over the period.
Other rating agencies which have assigned Kenya Re a stable rating have similarly cited the firm’s regional potential for expansion for the positive score.
“Additionally, the reinsurer is an established player across East Africa, supported by strong brand recognition, and increased capacity relative to local players. Going forward, management expects to expand operations across the rest of Africa, with a focus on Sub-Saharan African markets.
In this regard, competitive positioning across the foreign portfolio is expected to strengthen, providing the reinsurer with a moderate level of regional market strength,” said South Africa’s Global Credit Rating (GCR).
GCR assigned Kenya Re an AA rating in October this year.
The listed reinsurer has been expanding locally and internationally. It bought stakes in Uganda Re and Africa Trade Insurance earlier in the year.
Kenya Re, which also has a foothold in the West African market where it has a subsidiary in Abidjan, plans to tap into the southern African market by opening an office in Lusaka, Zambia.
The stock has been one of the best performers at the Nairobi Securities Exchange this year.
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Note: The results are not exact but very close to the actual.
