Kenya Reinsurance Corporation (Kenya Re) is eyeing expansion into new markets across the globe to boost income amid increasingly strong competition both locally and abroad, according to Business Daily Africa.
Jadiah Mwarania, Chief Executive Officer (CEO) of Kenya Re, said the company was looking to open regional offices in new markets, in addition to expanding its line of products in the 45 countries in Africa, the Middle East, and Asia that it currently operates in.
Mwarania noted that Kenya Re’s business had suffered in recent years as several countries – including Uganda, Ethiopia, Zimbabwe, Ghana, Sri Lanka, Nepal, and Vietnam – domesticated their reinsurance markets or established state-owner national reinsurers.
“When they form these national reinsurers it means they get compulsory cessions which reduces the volume of business available for foreign reinsurers,” Mwarania explained.
“We will counter this by setting up regional offices in response to domestication which will help us become more competitive,” he said at a press briefing following the company’s results. “We are also pursuing new reinsurance markets such as northern Africa, Middle East and Asia.”
Kenya Re’s net profits fell by 24.19% during the first half of 2018 due to a decline in gross written premiums, decreasing from Sh 1.62 billion (US $2.81 million) in 1H2017 to Sh 1.22 billion (US $2.12 million) at 1H2018.
The company’s net earned premiums also fell by 10.12% for the same period, although Kenya Re draws most of its gross premiums from the Kenyan market, where it will continue to benefit from a mandatory cession of 20% until 2020.
This guaranteed cession is backed by the Kenyan government, which owns a 60% stake in Kenya Re, with the remaining shares held by public investors.
Mwarania was replaced as CEO of Kenya Re by Michael Mbeshi earlier this year, but was reinstated following a court dispute.
