Kenya Re managing director Jadiah Mwarania. FILE PHOTO | NMG The Kenya Reinsurance Corporation (Kenya Re) has posted a 12.2 percent drop in net profit in the half year ended June weighed down by an increase in claims.
The Nairobi Securities Exchange (NSE)-listed re-insurer’s net profit stood at Sh1.08 billion in the period compared with Sh1.23 billion the year before.
Its net earned premiums jumped 16.6 percent to Sh7.42 billion during the period under review.
Net claims incurred increased by 48.57 percent to Sh4.99 billion in the period.
Kenya Re draws most of its gross premiums from the local market where it will continue to enjoy mandatory cession of 20 percent until 2020.
The guaranteed cessions to the company are backed by the government which owns 60 percent of the re-insurer, with the remaining shares held by the investing public at the Nairobi bourse.
Chief executive officer Jadiah Mwarania said earlier that the re-insurer, which offers cover to more than 160 insurance companies spread out in over 45 countries in Africa, Middle East and Asia is eyeing new markets across the globe in the face of stiffening competition.
Mr Mwarania said the firm is dealing with toughening rivalry from domesticated re-insurers in countries like Nepal, Ethiopia and Uganda as well as new entrants. Kenya Re is expected to distribute two billion new shares to qualifying investors this month.
Shareholders approved the issuance of these shares at the firm’s recent AGM. The new stocks will be allotted at a rate of three for every share held to investors who were in shareholder list as of June 14.