Kenya Re posts Sh3.1bn profit, claims increase 26pc

Kenya Reinsurance registered Sh3.1 billion in after-tax profit in 2014 compared to Sh2.7 billion realised in the previous year, representing 12 per cent growth.

Company chief executive officer Jadiah Mwarania said the performance would have been better were it not for payments made for the destruction caused by fire at Jomo Kenyatta International Airport, terror attack at Westgate mall and Thailand floods, which collectively consumed Sh1.05 billion.

Net claims increased by 26 per cent to Sh5.9 billion due to hefty payments as a result of the three incidents.

CLAIMS DUE TO FIRE

“There was a spike in claims in 2014 due to fire at Jomo Kenyatta International Airport that was paid Sh500 million, Westgate terror attack Sh50 million and Thailand floods that took another Sh500 million. The growth of the claims was more out of severity rather than frequency. This was 26 per cent increase in claims, which would have been an increase in profits,” he said.

The gross premiums written grew by 20 per cent from Sh9.6 billion in 2013 to Sh11.5 billion by December 31, 2014.

“This was due to focused implementation of our strategic plan as well as the overwhelming support from cedants across our markets.” The net earned premiums also grew by 20 per cent from Sh8.6 billion to Sh10.3 billion.

By end of December 2014, the net investment income stood at Sh2.6 billion compared to Sh2.3 billion in December 2013, representing a 14 per cent jump.

ASSETS INCREASED

The investment portfolio grew to Sh25.9 billion, last year, from Sh22.3 billion recorded in 2013.

The insurer’s asset base increased by 16 per cent to Sh32.2 billion in 2014 from Sh27.6 billion in 2013 while the shareholders’ funds went up by 18 per cent to Sh19.9 billion from Sh16.9 billion in 2013.

He said aggressive marketing was done in selected markets across Africa, the Middle East and Asia, which led to acquisition of new business and maintenance of existing treaties.

PRODUCT INNOVATION

The focus was on efficient claims management, product innovation and introduction of new covers.

He said the investment in Africa Trade Insurance Agency will boost the insurer’s business in Africa due to its track record in service delivery adding that similar objective will be achieved in taking up shareholding in Uganda Re.