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Kenya Re half-year profit rises to Sh1.5bn on lower forex losses
Kenya Reinsurance (Kenya Re) Corporation Limited Group Managing Director Dr Hillary Wachinga addressing participants during the launch of Kenya Re’s International Life Reinsurance Operations into global markets at Reinsurance Plaza in Nairobi on February 26, 2025.Â
Regional reinsurer Kenya Re posted a higher Sh1.5 billion net profit for the six months ended June 2025, up from Sh1 billion previously, lifted by a reduction in foreign exchange losses.
The firm, majority owned by the government of Kenya, saw its forex losses for the period fall to Sh22.2 million, down from Sh844.2 million a year earlier, as gains by the local currency plateaued in the period.
Previously, the re-insurer said its forex losses related to dollar-denominated assets, including Eurobonds whose receivables/interest income is set to US dollars.
Kenya Re serves more than 80 markets from Kenya and its subsidiary offices in Cote D’Ivoire, Zambia, and Uganda, a structure which exposes the business to exchange rate movements.
The lower forex losses helped Kenya Re offset a drop in its insurance service result, which fell to Sh302.9 million from Sh606.6 million a year prior.
An insurance service result is the profit or loss generated from the core insurance business, and is calculated as insurance revenue minus insurance service expenses, including incurred claims, acquisition costs, and changes in unearned profit reserves.
Kenya Re marked a rise in net expenses from reinsurance contracts to Sh598 million from Sh183 million, contributing to the weaker insurance service result.
Insurance service expenses fell to Sh5.4 billion from Sh6.6 billion previously, offsetting a decline in insurance revenue to Sh6.3 billion from Sh7.4 billion previously, even as ceded commissions fell.
The reinsurer also marked a reduction in operating and other expenses to Sh654.5 million from Sh964.7 million a year earlier.
Kenya Re has also marked unrealised gains in its equities and fixed income portfolios in addition to a paper gain in forex exchange differences on the translation of foreign operations by Sh437.8 million.
Gains on the reinsurer equities portfolio stood at Sh204.2 million, while the valuation of government securities held for sale improved by Sh40.6 million.
Kenya Re's asset base rose to Sh68.9 billion from Sh66.8 billion previously on higher cash balances, deposits with financial institutions, and quoted equities instruments.
The reinsurer's earnings per share, however, softened to Sh0.28 from Sh0.38 previously despite the improved profit.
