Kenya Re has announced positive financial results for financial year 2016 that has driven the growth of the corporation’s business.
Managing Director of Kenya reinsurance corporation, Jadiah Mwarania, during the official release of the full year’s results for the financial year 2016 termed continuous review and implementation of the strategy as a reason for the profits made.
“ our continuous review and implementation of our corporate strategy, has enabled us to achieve profitability amidst the fiercely competitive and dynamic reinsurance business environment in Africa, middle east and Asia” , he added.
Mwirania said that the profit before tax for the year 2016 stood at Ksh 4.2 billion while the net earned premiums grew by 6 percent from ksh.12 billion in the year 2015 to ksh.12.6 billion in 2016.
Investment income he added grew from ksh 3.04 billion to ksh 3.08 billion while net claims dropped by 6 percent from ksh 7.1 billion in 2015 to ksh 6.6 billion in 2016.
However, the MD said that operating expenses grew by 39 percent due to forex losses incurred from foreign markets which included unrealized losses from the Southern Sudan market owing to the hyperinflation experienced in that country.
“The corporation’s investment portfolio grew to Ksh. 28.28 billion in 2016 up from Ksh. 27.06 billion in 2015. The asset base increased from ksh. 35.95 billion in 2015 to Ksh. 38.49 billion in 2016, a 7 percent growth”, Mwirania said.
The MD acknowledged that the corporation experienced a number of challenges during the year 2016 ranging from slowed economic growth around the world, increased competition, premium undercutting and consequent slowed market expansion, setting up of national reinsurance companies in some markets and capping of interest rates in Kenya.
“Several countries also domesticated the markets for reinsurances with the effect of reducing available business to foreign reinsurers”, he said noting however that in response to the challenge and also to address growth, the corporation has put in place a comprehensive five year strategic plan to cover the period 2017-2021.
Mwirania said, the insurance industry in Kenya has a huge opportunity in the full domestication of marine insurance in the country noting that last year there was proposed domestication of marine insurance.
“This is a step in the right direction as the effects of the proposed domestication of marine insurance is yet to be fully realized in the insurance industry in kenya and the anticipated growth in the written premiums is yet to fully come through.
According to data from Kenya National Bureau of Statistics, Kenya imported goods worth Ksh 1.6 trillion (USD 15.7 billion) in 2015, 90 per cent of which were insured offshore.
During the briefing, the MD said that they had proposed dividends at 80 cents per share which will be discussed during the Annual General Meeting on 16th of June this year and payout done by 28th July 2017.