The Kenya Reinsurance Corporation (Kenya Re) has for the second year in a row posted a decrease in its net profit.
The reinsurance company’s net profit dropped by 12.2 percent in the first half of 2019 to stand at Ksh. 1.08 billion compared to the Ksh. 1.23 billion the company amassed in a similar period last year.
Kenya Re has attributed the significant decrease in profits to an increase in claims. During the period under review, the firm’s claims increased by 48.57 percent to Ksh. 4.99 billion. Its net earned premiums however increased by 16.6 percent to Ksh. 7.42 billion during the first half of the year.
According to the Business Daily, the reinsurance firm acquires a huge percentage of its gross premiums from the Kenyan market where it will continue to get obligatory cession of 20 percent until 2020 because of the government’s 60 percent stake in the company.
The Business Daily similarly reports that the reinsurance company is looking to further expand its global reach, spread out across a host of countries in Africa, Asia and the Middle East, amid increased competition from rival reinsurers in countries such as Uganda, Nepal and Ethiopia.
In May the company announced that it was looking to expand its regional footprint by setting up a fully-fledged subsidiary in neighbouring Uganda just four years after venturing into the market amid increased competition from other reinsurance firms in the country. The competition has eaten into Kenya Re’s portion of Uganda’s reinsurance pie and according to the firm, only by taking the competition into these markets will it cope with the rising contention.
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