Home » Jadiah Mwarania-led Kenya Re sees mid-year profits nosedive

Jadiah Mwarania-led Kenya Re sees mid-year profits nosedive

by Omokolade Ajayi

Kenya’s largest reinsurer has declared Ksh533.7 million ($4.9 million) in profit for the first half of 2021

Compared with the previous year, Kenya Reinsurance Corporation’s profits fell by 66 percent from Ksh1.57 billion ($14.43 million) in the first half of last year to Ksh533.7 million ($4.9 million) at the end of the first half of 2021.

The double-digit plunge in profits came off the back of a sharp rise in fees and premiums paid in retrocession and increased operating costs and gross claims paid to shareholders.

Multiple lines of insurance assets exposed to COVID-19 emerging risk compelled insurers and reinsurers alike to reduce their risk by diversifying into the primary insurance and reinsurance markets.

This caused retrocession premiums to rise by 200 percent from Ksh256.04 million ($2.35 million) in the first half of 2020 to Ksh769.90 million ($7.08 million) in the first half of 2021.

Kenya Reinsurance Corporation, also known as Kenya Re, is a reinsurance company headquartered in Nairobi, Kenya’s capital and largest city.

Aside from being the oldest reinsurer in East and Central Africa with a wide reach in Africa, Kenya Re is the largest reinsurer in Kenya. Insurers in Kenya are required to place one-fifth of their business with the company.

Kenya Re serves more than 265 insurance companies in 62 countries across Africa, the Middle East and Asia, with over 50 percent of its revenue generated from foreign markets.

In the first half of 2021, its gross written premium rose from Ksh9.07 billion ($83.37 million) to Ksh9.59 billion ($88.15 million), which translates to a single-digit growth of six percent.

Operational challenges due to the pandemic pressured the company’s mid-year profits below the 1-billion shilling mark.

As of press time, 10:00 AM (UTC), Aug. 9, shares in the leading reinsurance company were trading at Ksh2.57 (0.02362), down 39 basis points from its opening price today.

At the current price, the company’s market capitalization is Ksh7.22 billion ($66.36 million). In comparison, the Kenyan government’s equity stake in the company held through the National Treasury is valued at Ksh4.32 billion ($39.7 million).

Managing Director Jadiah Mwarania earned Ksh36.7 million in remuneration last year. He has 400,000 shares in Kenya Re, worth Ksh1.03 million ($9,465).

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