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Kenya Re to enter Tanzania, India markets by next June
Kenya Reinsurance 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.
Kenya Reinsurance Corporation (Kenya Re) plans to set up a subsidiary in Tanzania and a branch in India within the next four months as it embarks on an expansion strategy to win more business in Africa, Middle East and Asia.
Hillary Wachinga, managing director at Kenya Re, told the Business Daily that the entry into Tanzania would help them win back the business it lost following the introduction of regulations that barred reinsurers without local presence from underwriting any business in that market.
Kenya Re is also preparing for a return to India, a market where it had operated for about three decades but quit in 2023 on the back of underwriting losses from agricultural reinsurance.
The south Asian market is significant for Kenya Re given that the reinsurer’s first ever business came from there in 1971.
“In India and Tanzania, we have to be there physically before June this year. Tanzania requires a capital of $6 million (Sh775 million) but they allow us to stagger over a three-year period. India will not require capital because it is a branch and not a subsidiary,” said Mr Wachinga.
“Tanzania decided to domesticate reinsurance, meaning that if you are not in that market, you cannot get their business. This law led to us losing business from that market. We have decided to go back and defend our market share.”
Currently, Tanzania has three reinsurers—East Africa Reinsurance (Tanzania) Company, Grand Reinsurance Tanzania and Tanzania Reinsurance Company Limited.
Mr Wachinga explained that Kenya Re branch in India would be located in a special economic zone (SEZ) region, giving it a tax break of 10 to 15 years. Kenya Re wants to use India as a launch pad to the entire Asian market countries.
The SEZ location in India will allow Kenya Re to conduct business in foreign currency as opposed to Indian rupees. This will give it a chance to accumulate dollar reserves to smoothen out foreign exchange movements in other markets it serves.
According to Mr Wachinga, Kenya Re’s India operations will only focus on three business lines—fire, engineering and marine— and targets to hit revenues of about Sh1.5 billion within the first full year and break-even within three years.
“We are taking a very ambitious but cautious expansion strategy. Other countries that we are targeting to set up are South Africa, Egypt, Ethiopia and Democratic Republic of Congo and Nigeria,” he said.
The reinsurer, which is 60 percent owned by the Kenyan government, serves the more than 80 markets through its head office in Kenya as well as three subsidiaries in Cote D’Ivoire, Zambia and Uganda.
The firm’s net profit for the year ended December 2023 grew by 41.6 percent to Sh4.97 billion from Sh3.5 billion, helping it to raise its dividend per share to Sh0.30 totalling Sh839.9 million from Sh0.20 amounting to Sh560 million.
The reinsurer followed it up with a bonus issue that saw shareholders get one share for each held, triggering a gain of the share price at the Nairobi Securities Exchange.
