Reinsurance Company Kenya Re is looking to expand its regional footprint by setting up a fully-fledged subsidiary in neighboring Uganda just four years after venturing into the market.
The company entered the Ugandan market in 2015 by acquiring a five per cent stake in the Uganda Reinsurance Company in a deal estimated to be worth Ksh. 20 million.
The company’s decision to venture into the foreign market was revealed in a notice to shareholders that discussed the scheduled agenda of the company’s 2019 Annual General Meeting (AGM) which is slated to take place on June 14, 2019.
According to the firm, in a news report by the Business Daily, the establishment of the subsidiary will be subject to approval via a vote by the firm’s shareholders during the company’s scheduled AGM.
Directors of the firm will also consult the shareholders on terms upon which the Uganda subsidiary will be established. If approved by shareholders, Kenya Re will proceed to ask for regulatory approvals from relevant government bodies.
“That the company be and is hereby authorised to establish a subsidiary in Uganda on such terms and conditions as may be determined by the relevant regulatory authorities and the board of directors,” said the firm’s AGM notice in the news report by the Business Daily.
The Business Daily similarly reports that the company’s decision to venture into the market was informed by rising competition in the region as a result of countries such as Uganda, Tanzania and Ethiopia setting up their own reinsurance agencies.
This has eaten into Kenya Re’s portion of the region’s reinsurance pie and according to the firm only by taking the competition into these markets will Kenya Re cope with the rising contention.
Despite initially owning a five per cent stake in the Uganda Reinsurance Firm, Kenya Re in its 2017 annual report disclosed that it increased its shares in the Ugandan rival company to 11.5 per cent. It remains to be seen whether the company will entirely offload its stake in Uganda Re should it proceed to set up the subsidiary.