Kenya Re-insurance Corporation (Kenya Re) has posted a 35% rise in profit before tax to Ksh4.18 Billion for the full year ended December 2019 from Ksh3.1 billion in 2018, the reinsurer’s financial results show.
The profit increase was driven by 18% growth in gross written premiums in addition to 10% growth in investment income.
Gross written premiums grew by 18% to Ksh17.52 billion in 2019 from Ksh14.84 billion the previous year.
Net earned premiums rose by 9% from Ksh14.21 billion in 2018 to Ksh15.53 billion in the reporting period. Investment income grew by 10% from Ksh3.39 billion to Ksh3.71 billion on a sound investment strategy.
The corporation’s cedant acquisition costs increased by 5% from Ksh3.89 billion to Ksh4.09 billion while the increase in gross premium written was 18%.
Shareholders’ funds grew by Ksh3.58 billion, an increase of 13%, from Ksh28.37 billion in 2018 to Ksh31.95 billion in 2019.
Net incurred claims grew by 25% to Ksh11.06 billion from Ksh8.83 billion in 2018 while the corporation’s operating expenses increased by 1% from Ksh2.02 billion as at 31 December 2018 to Ksh2.04 billion as at 31st December 2019.
While releasing the results, Kenya Re Managing Director, Jadiah Mwarania said the company has recorded significant growth in shareholders funds despite a tough business operating environment.
“In the face of a challenging operating and macro environment encountered in 2019, the corporation achieved impressive growth in the gross written premiums, investment income, profit before tax and profit after tax.” said Mr. Mwarania.
Key challenges faced by the corporation during the financial year included; reinsurance business domestication in many of its markets, premium rate undercutting, increased retention capacity by pedants, change in structure of reinsurance treaties, regulatory changes, competition, capping of interest rates, bearish market trends in quoted equities, oversupply of rental space and limited investment vehicles.
Consequently the corporation’s shareholders will receive a dividend payment of Kshs. 0.10 per share once approved by an AGM.
“In the wake of the COVID-19 pandemic we continue to seek ways to work smart and heavily leverage on technology to mitigate its negative effects, we will analyze the impact of the pandemic on business and develop appropriate response strategies.” said Mr. Mwarania.
He added that the pandemic will impact the written premiums, claims and investment incomes amongst other business variables. He also stated that the corporation had fully activated its business continuity plan to minimize work disruptions and ensure that the business continues to function in these challenging times.
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