Kenya RE posts Ksh4.2 billion pre-tax profit despite a challenging environment, sets up 5-year plan as increased competition threatens insurance sector

Kenya RE posts Ksh4.2 billion pre-tax profit despite a challenging environment, sets up 5-year plan as increased competition threatens insurance sector
  • Kenya RE has announced a pre-tax profit of Ksh4.2 billion for the year ended December 2016 despite a challenging market environment
  • During the period under review, investment income grew from Ksh3.04 billion to Ksh3.08 billion while net claims dropped by 6% from Ksh7.1 billion in 2015 to Ksh6.6 billion in 2016
  • Operating expenses grew by 39% due to forex losses incurred from our foreign markets which include unrealized losses from the southern Sudan market owing to the hyperinflation experienced in that country

Insurance firm, Kenya RE has announced a pre-tax profit of Ksh4.2 billion for the year ended December 2016.

The firm attributes the performance to innovations and development, emergence of new covers for its clients as well as its aggressive marketing strategy in key market segments.

READ ALSO: Poverty slowing down growth of insurance sector in Kenya, Fitch Ratings says

Kenya RE Managing Director, Jadiah Mwarania said the corporation experienced a number of challenges including 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.

“In response to the challenges and to address growth and development objectives, the corporation has put in place a comprehensive five year strategic plan to cover the period 2017-2021,” said Mwarania.

READ ALSO: Over 88% of Kenyans have no insurance cover, survey shows

For the period under review, investment income grew from Ksh3.04 billion to Ksh3.08 billion while net claims dropped by 6 per cent from Ksh7.1 billion in 2015 to Ksh6.6 billion in 2016.

The corporation’s investment portfolio grew to Ksh28.28 billion in 2016 up from Ksh27.06 billion in 2015 whereas the asset base increased from Ksh35.95 billion in 2015 to Ksh38.49 billion in 2016 representing a 7% growth.

Shareholders’ funds increased from Ksh21.93 billion in 2015 to Ksh24.13 billion in 2016, which was a 10% growth.

However, operating expenses grew by 39% due to forex losses incurred from our foreign markets which include unrealized losses from the southern Sudan market owing to the hyperinflation experienced in that country.

During the period under review, net earned premiums grew by 6% to Ksh12.6 billon up from Ksh12 billion the firm recorded the previous year.

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