Kenya Re half-year profit up on higher premiums

Kenya Reinsurance managing director Jadiah Mwarania speaks at a past event  in Nairobi.  PHOTO | FILE

Photo credit: NATION MEDIA GROUP

What you need to know:

  • The growth is from Sh1.08 billion posted in preceding similar period and keeps the re-insurer on strong footing after the all-time high full year earnings of Sh3.97 billion posted last year.
  • Gross written premiums grew by 2.4 percent to Sh9.07 billion as investment income dropped by Sh41 million to Sh1.9 billion.

Kenya Reinsurance Corporation (Kenya Re) half year net profit to June has jumped 45.9 percent to Sh1.57 billion on higher premiums, defying the challenging environment facing businesses in the wake of Covid-19.

The growth is from Sh1.08 billion posted in preceding similar period and keeps the re-insurer on strong footing after the all-time high full year earnings of Sh3.97 billion posted last year.

The performance makes the reinsurer, which is 60 percent owned by government, among the few State-controlled entities that are posting strong performances and paying dividends.

Short-term business, also called general reinsurance, continued to dominate, accounting for Sh1.23 billion or 78.1 percent of total profit.Net profit from long-term business called life reinsurance, was Sh342.6 million.

Doubtful debts

Gross written premiums grew by 2.4 percent to Sh9.07 billion as investment income dropped by Sh41 million to Sh1.9 billion.

Investment income for the period under review stood at Sh1.91 billion, which is a drop from previous similar period’s Sh1.95 billion. “This is attributed to the effect of Covid-19 pandemic which has significantly affected the investment environment,” said the re-insurer.

Total income during the half year grew by 12.7 percent to Sh10.6 billion even as net claims and benefits expanded at a muted pace of three percent to Sh5.1 billion. The insurer has, however, more than doubled the provision for doubtful debts from Sh100.6 million to Sh270.9 million to reflect the tough operating environment.

Fire recorded the highest gross premium of Sh2.59 billion, a 71 percent growth from Sh1.57 billion in previous similar half year.

Life business grew

Life business grew by 17 percent to Sh909 million as non-life-business jumped by two percent to Sh8.16 billion.

CEO Jadiah Mwarania in March said Kenye Re wants to establish a Shariah-compliant subsidiary in Egypt after converting into capital Sh5.25 billion from its cash reserves through issuance of bonus shares.

Global Credit Ratings (GCR) last month affirmed Kenya Re a national scale financial rating of AA+ with a stable outlook, citing strong capital base and healthy liquidity.

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