Corporate News
Mr Jadiah Mwarania, Kenya Re managing director. PHOTO | FILE
By DAVID HERBLING, hdavid@ke.nationmedia.com
In Summary
Kenya Re
has set up a subsidiary in Zambia as part of its strategy to cut its
reliance on the local market, with the company announcing a 13 per cent
net profit growth in the year ended December.
The Nairobi Securities Exchange-listed firm said its net
profit in the period stood at Sh3.5 billion compared to Sh3.1 billion a
year earlier, benefiting from a growth in premiums and investment
income.
The company declared a dividend of Sh0.75 a share, up from Sh0.70 per share paid out for the full year 2014.
The Lusaka unit began operations in December and
will serve as Kenya Re’s regional hub to serve the southern Africa
markets such as Botswana, Lesotho, Namibia, South Africa and Swaziland.
The Zambian subsidiary becomes the second after the
first one set in Abidjan, Ivory Coast in May 2014, which made a net
profit of Sh120 million in its first full-year operations.
“The Lusaka office will help us win new business in the Southern Africa markets,” said Managing Director Jadiah Mwarania.
Kenya Re said it invested Sh20 million in the
Lusaka unit where the minimum capital requirement to set up an insurance
firm is ZK1 million ($192,000).
The company, controlled 60 per cent by the National
Treasury, could face increased competition in the local reinsurance
business after the entry of Togo-based CICA-RE last week.
Other players are East Africa Re, Continental Re, Zep Re, Africa Re, Munich Re and Ghana Re.
Kenya Re’s entitlement to a fifth of local
reinsurance premiums, however, was renewed last year for a five-year
period in a move that guarantees it a significant portion of local
reinsurance premiums.
The Ivorian subsidiary, started in 2010 as a
representative office, saw Kenya Re report group results for the first
time, giving investors insights into the financial performance of the
wholly-owned Abidjan unit.
Kenya Re’s total gross premium grew 13 per cent to
Sh13.06 billion helped by the new re-insurance deals bagged in the
African markets.
Net claims surged 19 per cent to Sh7.3 billion in
what Kenya Re blamed on “sizeable” payouts to cover the April 2015 Nepal
earthquake where it was exposed to the tune of Sh300 million.
The company’s investment income grew by nearly a
fifth to Sh3.04 billion thanks to higher earnings from government
securities which offered high returns in the second half of 2015
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