Capital Markets

Global Credit affirms Kenya Re’s stable outlook on strong capital, liquidity

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Kenya Re managing director Jadiah Mwarania. FILE PHOTO | NMG

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Summary

  • Global Credit Ratings (GCR) has affirmed Kenya Reinsurance Corporation (Kenya Re) a national scale financial rating of AA+ with a stable outlook, citing strong capital base and healthy liquidity.
  • The South African rating agency said the reinsurer has demonstrated a strong financial profile both in Kenya and the international markets it serves.
  • Kenya RE last year booked a net profit of Sh3.97 billion up from Sh2.29 billion posted the previous year, translating to a growth of 73 percent on the back of properties revaluation.

Global Credit Ratings (GCR) has affirmed Kenya Reinsurance Corporation (Kenya Re) a national scale financial rating of AA+ with a stable outlook, citing strong capital base and healthy liquidity.

The South African rating agency said the reinsurer has demonstrated a strong financial profile both in Kenya and the international markets it serves.

Kenya RE last year booked a net profit of Sh3.97 billion up from Sh2.29 billion posted the previous year, translating to a growth of 73 percent on the back of properties revaluation.

“The entity demonstrated a strong financial profile, while business profile remained at intermediate levels, with small and risky presences in foreign markets diluting entrenched strong domestic market position,” said GCR.

GCR, however, downgraded Kenya Re’s international scale financial strength rating to B, from B+ on Kenya’s risks revisions. It, however, retained the table outlook too.

The agency said the international scale financial strength rating was lowered to reflect higher operating risk in jurisdictions where gross premiums are derived.

Notably, Kenya and India accounted for 75 per cent of gross premiums in the financial year ended 2019, up from 70 per cent in the previous year.

Unrealised property revaluation gains saw Kenya Re’s capital grow by 13 per cent to Sh33.65 billion last year from Sh29.4 billion.

GCR said the capital adequacy ratio was maintained at about three times the minimum, reflecting a sizeable capital base relative to the growing quantum of the insurance market and credit risks.