Kenya-Re profits jump to Sh1.4 billion
Kenya Reinsurance Corporation recorded Sh1.44 billion as half year pre-tax profits up from Sh1.03 billion in the same period of last year. The listed re-insurer attributed the 40 per cent profit rise to strong performance of its investment portfolio during the six months as well as diversification in its products offering. The corporation's investment income grew 80 per cent from Sh722 million last year to Sh1.3 billion due to good returns in the stocks market, increased rental incomes and higher interest rates that suited them.
Reinsurance business also recorded growth with a 23 per cent rise in gross premiums from Sh2.74 billion to Sh3.36 billion driven by market diversification, new business shares and taking up lower risk underwriting. The company incurred Sh1.5 in claims which was 55 per cent higher than the Sh986 incurred last year. Its profit after tax was 37 per cent higher at Sh1.15 billion from Sh845 million last year.
Kenya Re managing director Jadiah Mwarania said: “The positive financial performance this half is attributed to our ability to spot and seize business opportunities in our chosen markets in Africa, Middle East and Asia”. Kenya Re has been operating a West African subsidiary based in Abidjan for two years but the Kenya market still contribute the bulk of its earnings.
Mwarania also credited the growth to proactive investment portfolio management and property rental incomes. Kenya Re share had closed at Sh10.60 on Thursday which was 3.2 per cent drop from Wednesday's Sh10.95 price. “We believe the price of our share is not completely at variance with the market performance,” said Mwarania during the investor briefing.
The reinsurer has recently ventured in to new business segments like political risks cover and micro insurance. It is now planning to undertake Islamic re-insurance (Retakaful) with a board already in place to handle this. Kenya Re is also conducting trainings on oil and gas sector underwriting to take advantage of the new natural resources discovery in Kenya. It has partnered with an Australian consulting firm, Total Risk Solutions, to train the local market on insurance opportunities in the emerging sector. The corporation plans to restructure its investment portfolio with a plan to increase asset holdings in property and grow mortgage portfolio. The corporation's assets have grown from Sh19.1 billion to Sh21.0 billion in the six months representing a 10 per cent growth.