Kenya Re is eyeing new markets across the globe to boost income in the face of stiffening competition both locally and abroad.
Kenya Reinsurance Corporation (Kenya Re) #ticker:KNRE, which offers cover to more than 160 insurance companies spread out in over 45 countries in Africa, Middle East and Asia says it is eyeing new markets across the globe to boost income in the face of stiffening competition both locally and abroad.
Chief executive officer Jadiah Mwarania said the NSE-listed re-insurer is looking to open regional offices in new markets besides expanding the company's line of insurance products where it already operates.
Mr Mwarania noted that several countries have domesticated their reinsurance markets or set up State-owned national reinsurance companies that are eating into its business.
“When they form these national reinsurers it means they get compulsory cessions which reduces the volume of business available for foreign reinsurers.”
Countries that have done this include Uganda, Ethiopia, Zimbabwe, Ghana, Sri Lanka, Nepal and Vietnam among others.
“We will counter this by setting up regional offices in response to domestication which will help us become more competitive,” said Mr Mwarania at a Friday press briefing shortly after announcing the company’s results. “We are also pursuing new reinsurance markets such as northern Africa, Middle East and Asia.”
Kenya Re posted a 24.19 per cent drop in net profit in the half year ended June, weighed down by a decline in its gross written premiums. Its net profit stood at Sh1.22 billion in the period compared with Sh1.62 billion the year before.
Its net earned premiums reduced 10.12 per cent to Sh6.37 billion during the period under review. Kenya Re draws most of its gross premiums from the Kenyan market where it will continue to enjoy mandatory cession of 20 per cent until 2020.
The guaranteed cessions to the company are backed by the Kenyan government which owns 60 per cent of the reinsurer, with the remaining shares held by the investing public at the Nairobi bourse. The re-insurer was in March this year in the eye of a storm after it sent home Mr Mwarania and replaced him with Michael Mbeshi, the reinsurer’s property management general manager, in an acting capacity.
Mr Mwarania went to court to protest the sacking and has been re-instated by the Employment and Labour Relations Court with Kenya-Re appealing the decision.
Mr Mwarania reported back in office last month without any resistance from the board which had sacked him.
The judge ordered the reinstatement of Mr Mwarania and directed full payment for the period he was away and directed that the board should not interfere with him.
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