Kenya Reinsurance Corporation Limited has posted cumulative after-tax profits of KES4.9bn up 40% in 2023 from KES3.5bn in the earlier 2022 period. Total comprehensive income rose to KES7.8bn for the period, from KES3.9 billion in 2022.
The reinsurer’s insurance revenue however decreased from KES23.1bn in 2022 to KES19.6bn in 2023, based on the withdrawal from the Indian agricultural market.
The reinsurer saw an improvement in underwriting performance stemming from an increase in net claims and benefits incurred for both general and life businesses to KES 11.7nb in 2023 (2022: KES 10.1bn).
On a consolidated basis, Kenya Re evidenced relative stability in earnings performance with a cross-cycle return on total income levelling at 15.7% in 2023.
The general business continued to register healthy bottom-line profitability, anchored by strong investment income from a relatively diversified investment portfolio. The 4-year cross-cycle combined ratio came in at 100.3%, compared to 106.3% in 2022.
Background
As a national reinsurer, Kenya Reinsurance Corporation commands a dominant position in the local market, supported by access to compulsory cessions.
The business mix presents a good spread of premiums across multiple products and geographies. Accordingly, the entity writes business with six lines of business each contributed more than USD10m.
Kenya Re’s capital base has registered annualised growth averaging at 14% over the last two years, closing at KES48.1bn as at December 2023, (2022: KES41.0bn and 2021: KES37.1bn), on account of increased translation reserves and retained earnings.
Similarly, statutory solvency for both the short-term and long-term business was maintained above the prescribed capital requirement of 200%, registering at 399% and 966% (2022: 401% and 1017%), respectively.
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