Nairobi, 4th August, 2017… Kenya Reinsurance Corporation has posted a 4% percent rise in first-half pretax profit today, boosted by a 6% rise in gross premiums written even as net premium earned grew to 9%. The financial results were presented during the investor briefing held at the Intercontinental Hotel in Nairobi earlier today.
Gross Premiums Written grew by 6% from Kshs 7.096 Billion as at 30th June 2016 to Kshs 7.504 Billion as at 30th June 2017. The Net Earned Premiums grew from Kshs 6.475 Billion to Kshs 7.089 Billion, which is a 9% increase as of 30th June, 2017, the investment income stood at Kshs 1.707 Billion compared to Kshs 1.739 Billion in June 2016, which is a decrease of 2%. The Asset Base increased from Kshs 38.494 Billion in December 2016 to Kshs 40.736 Billion in June 2017, a 6% Growth. The Shareholders’ funds went up from Kshs 24.133 Billion in December 2016 to Kshs 25.908 Billion in June 2017, representing a 7% growth.
The Net Claims incurred increased by 2% to Kshs 3.607 Billion as at June 2017 from Kshs 3.549 Billion as at June 2016. This is despite the 6% growth in the Gross Premium. The pretax profits grew by 4% from Kshs 2.212 Billion in June 2016 to Kshs 2.294 Billion in June 2017. Profit after tax increased by 4% From Kshs 1.564 Billion in June 2016 to Kshs 1.622 Billion in June 2017.
The announcement comes a few months after the Corporation was recognized by Cytonn Investments as the top listed insurance company from both an intrinsic and financial perspective. The key performance drivers responsible for the Corporation’s positive financial performance in the reinsurance business include increased focus on Retakaful business segment, strengthened cedant and intermediary relationships and market identification and segmentation.
Other factors included diversification of the business portfolio in chosen markets, effective and timely response to changing customer needs as well as prudent underwriting and business acceptance which equally contributed to the positive outcome.
Some of the challenges that faced the corporation during the period include: premium undercutting in many insurance markets that continues to affect growth negatively and risk based capital regulations meaning that insurance companies are able to retain more risks.
Speaking at the investor briefing Kenya Re Chairman, Mr. David K. Kemei cited premium investment prudence and diversification as key for the realization of the forecasted increased income. “The results todayreflect our enhanced investment earnings as a result of timely and lucrative investment in strategic high divided companies and government securities. This coupled with proficient management of all investment properties has enabled us to post a positive business outlook,” said Kemei.
The positive financial posting is further complemented by the Corporation’s maintained AA (Double A) rating by Global Credit Rating ( GCR), B+ AM best rating both a compliment to the firm’s enhanced risk practices, technological innovation, market growth driven and continued brand equity & visibility growth.
Highlighting the reinsurer opportunities ahead of year close, Mr. Jadiah Mwarania Managing Director, Kenya Re undertook to maintain financial robustness for increased shareholder value. “Today, our financial results encourage the strategic path the corporation has undertaken. Our business sustainability will be pegged on operational prudence, portfolio diversity as well as robust investment and risk management,” noted Mr. Jadiah Mwarania.
Separately, analysts have forecasted a 3.4% global growth in 2017 based on expected recovery from shocks such as Brexit in 2016. Sub Saharan African growth is expected to pick up moderately to 2.9% in 2017.