Kenya Reinsurance Company expects a 50 percent growth in premiums from the life reinsurance business within a year following launch of a unit targeting long-term clients in Africa, the Middle East, and Asia.
The firm on Wednesday launched its international life reinsurance operations, which gives it room to target individual and corporate clients spread over 82 markets where it has mainly been offering general reinsurance.
Revenue from long-term business, which includes individual and group life reinsurance, stood at Sh2.58 billion or just 15.2 percent of the Sh19.57 billion in year ended December 2023. This shows the dominance of short-term or general reinsurance business.
Now the reinsurer wants to deepen the share of the long-term business in the overall reinsurance revenue by going for markets outside Kenya. Currently, the only life business has been in Côte d`Ivoire where it runs a small operation.
Kenya Re Managing Director Hillary Wachinga said the reinsurer has been receiving a lot of requests for life reinsurance from the clients it offers general reinsurance.
He added that emerging markets across Africa, Asia, and Latin America are witnessing strong growth in life insurance penetration, presenting an opportunity for Kenya Re to tap.
“We are so confident that once we open up to offer life reinsurance beyond Kenya, we should be able to increase our revenue from this line by 50 percent within the first year,” said Mr Wachinga in an interview after the launch of the dedicated unit.
“When we interact with our clients, there's that demand. Again, if you look at life business, it is growing quite fast in almost all our key markets. This gives us an opportunity to cross-sell- given that we are already serving them with general reinsurance products.”
The reinsurer, which is 60 percent owned by the Kenyan government, serves over 80 markets through its head office in Kenya as well as three subsidiaries in Cote D’Ivoire, Zambia, and Uganda.
Kenya Re says that by diversifying its product offerings and geographic reach, it will minimize exposure to any single market.
The firm’s net profit for the year ended December 2023 grew by 41.6 percent to Sh4.97 billion from Sh3.5 billion, helping it to raise its dividend per share to Sh0.30 totaling Sh839.9 million from Sh0.20 amounting to Sh560 million.
The reinsurer followed it up with a bonus issue that saw shareholders get one share for each held, triggering a gain in the share price at the Nairobi Securities Exchange.
Net profit for the six months ended June 2024 stood at Sh1.06 billion, a 10 percent decrease from Sh1.17 billion in the preceding period despite a 20 percent growth in insurance revenue to Sh10.3 billion.
The decline was mainly driven by foreign exchange (forex) losses of Sh800 million in the review compared to forex gains of Sh560 million in the previous similar period.
