Kenya Re has reported a profit decline of 24% to Ksh 1.2 billon during the six month period ended in June 2018.
Gross written premiums declined by 15.6% while net earned premiums fell by 10.1% to Ksh 6.4 billion. The decline in net earned premiums was caused by overall loss of business across key markets including Ghana, Nigeria, India, Ethiopia and Nepal.
In March, the reinsurer was looking to buy stakes in national reinsurance companies so as to strengthen its market share after Uganda, Tanzania and Ethiopia set up their reinsurance companies in return declining the firm’s market share.
The re-insurance provider net claims decreased 6.8% to Ksh3.4 billion which was neutralized by a 6.6% increase in operating expenses to 745.1 million from 699 million in 2017.
Investment income rose by 14% driven by the general recovery in economic activity together with a 40% to 16.7 million income from government securities from Ksh 11.9 million in 2017.
The company’s board members earlier in the year fired CEO Jadiah Mwarania who was later reinstated by the employment and Labour relations court citing wrongful termination.
“The loss of business in key markets as a result of domestication is expected to subdue topline growth in the short to medium term. However, the resurgence of local business activity combined with increased government spending may boost the uptake of insurance products which, should eventually trickle down to the reinsurance business through elevated insurance premiums ceded by insurers.” Gift Kori Research Analyst Apex Africa Capital Ltd.
Kenya Re provides reinsurance services to more than 265 companies spread out in Africa, Middle East and Asia.