• From these humble beginnings, the oldest reinsurer in the East African region has witnessed exponential growth.
• It is proud to celebrate fifty years of successful existence.
On January 28, 1971 the then Minister of Finance and Economic Planning Hon. Mwai Kibaki gave life to an Act of Parliament of 1970 by appointing a Board of Directors for the State Reinsurance Corporation of Kenya with Thomas Okelo Odongo, a former Assistant Minister for Finance as its first Chairman.
Also appointed in the same Gazette Notice No.266 were Messrs. Eliud Mwamunga, Andrew Mwangi Mathai, D.A. Stewart, S. Ngwiri and the Permanent Secretary to the Treasury.
This is how Kenya Reinsurance Corporation as we know it today was born.
After four years, Odongo paved way for the next chairman Francis Thombe Nyamo who took over the helm for six years before being appointed the first indigenous Managing Director in 1981.
Since its inception to date, the Corporation has had a rich and diverse selection of Boards and Managing Directors who have steered the institution to its current state. These have, among others included Prof. S.H. Ominde, A.T. Kaminchia, Peter Kenneth and Andrew Omanga.
Broadly, the Corporation’s mandate during its initial formation was four-fold; increase retention capacity within the country and reduce the need to purchase reinsurance from external reinsurers, regulate the insurance industry (now performed by IRA), contribute towards local expertise in the insurance and reinsurance industry and generate funds for investment in the national economy.
From these humble beginnings, the oldest reinsurer in the East African region has witnessed exponential growth across all business lines and is proud to celebrate fifty years of successful existence. As it embarks on its next phase of growth, the focus will be strengthening and reviewing its business model and business processes to stay relevant in an increasingly competitive environment.
The first risk the Corporation underwrote was a fire in 1971. In the same year, it declared a net premium income of Sh5,915,839 and a gross profit of Sh593,486. This was achieved with a staff complement of eight (8) employees.
In 1973 underwriting of marine and aviation was commenced while motor business was taken up in 1974. International business was taken up three years later in 1977.
From these modest results, the Corporation has grown to achieve in the year 2020, gross premiums of Sh18,535,220,000 and gross profit of Sh3,983,593,000. Total assets now stand at Sh53,236,583,000.
It is worth noting that the Corporation has never declared a loss in any financial year. Indeed, Kenya Re has always remained a going concern and at no time in its history has it been declared bankrupt.
The Board recognized the need to diversify its portfolio revenue streams in order to meet any reinsurance claims that could arise.
Towards this end, the construction of Reinsurance Plaza, Nairobi was commissioned in 1978. The building was completed in 1982 and paved the way for more commercial and residential property projects developed by the Corporation.
Some of the projects that have been developed by the Corporation over the years include Reinsurance Plaza Mombasa (now University of Nairobi, Mombasa Campus), Reinsurance Plaza Kisumu, Anniversary Towers, Kenya Re Towers, Plainsview Estate, Villa Franca Estate, South C Flats and multiple residential estates within the country that have since been sold off.
Property, therefore, continues to be a key source of income for the Corporation and contributes to our profitability. We have since then, however, diversified our portfolio to have more liquid securities in keeping with regulatory requirements.
One key milestone for the Corporation was the Privatization which took place in 2007 and saw 40 per cent of government shareholding availed for purchase by private investors in the Nairobi Securities Exchange.
A total of 240,000,000 shares were floated at the Exchange. We had a strong asset base of Ksh 11.3 billion and more than 21% of all domestic re-insurance premiums. This achievement was realized under the stewardship of the first female board chairman, Nelius Kariuki and similarly, the first female Managing Director Eunice Mbogo.
The Initial Public Offering coincided with the first year that Kenya Re’s profits hit the one (1) billion mark to stand at Sh1,074,431,023. Staff numbers had grown gradually to an all-time high of 560 employees in the year 1993 after which various voluntary retirement schemes were instituted until the year 2001 when the targeted optimal staff number of 110 was achieved.
Since then, as the business landscape evolved and new functional areas of operation were incorporated, the staff complement has since grown back up to 150. Some of the newer functional areas include Risk and Compliance, Actuarial and Occupational Health and Safety. As regards our authorized share capital, this has grown to 3,200 million ordinary shares with a par value of Sh2.50 each. This has greatly strengthened our presence in our international markets.
Today, the insurance industry is at a tipping point. Rapid technological change, disruption through new, more efficient forms of capital and an evolving risk landscape are challenging industry incumbents. Inevitably, the winners will be those who find ways to harmonize analytics, technology, industry innovation, and modelling. Huge competitive pressures, rising expense ratios, an evolving risk landscape and rapid technological advances are forcing change upon an industry that has traditionally been considered somewhat of a laggard.
The Corporation has recorded a significant average growth in gross written premiums of 22% over the last 50 years. We can boldly project that the next 50 years will be an exciting period in our growth trajectory as our premiums will exceed Sh150 billion while our gross profits will hit Sh30 billion.
In particular, we will seek to leverage the right technologies to bring data, workflow and business analytics together to continuously drive more informed, timely and collaborative decision making across the enterprise while taking full advantage of the rise of technological uptake.
Our potential may also be unleashed with further divestiture of Government shareholding and partnership with a strategic investor in order to compete effectively with increased foreign and local reinsurers.
We shall remain true to our brand and will definitely be here in another half-century to secure your future with seamless stability.
Chiboli Shakaba, Chairman KenyaRe