11 May 2008
Nairobi — Kenya Reinsurance Corporation (Kenya Re) has become the first non-bank firm listed on the finance and investment segment to reach the Sh1 billion pre-tax barrier.
Venturing into new regional markets saw the reinsurer post Sh1.1 billion profit, before restructuring costs, in the year ended December 31, 2007.
The corporation's earnings were boosted by the buying into Seguros of Angola, UAP Uganda and New Sudan Insurance Company. Kenya Re also improved its dealings with brokers like Ashford Page Gems of London.
Spreading tentacles
"Our aggressive marketing and acquisition of new businesses in the region has paid off resulting in the impressive financial results we have recorded," said managing director, Mrs Eunice Mbogo.
The international re-insurer is now focusing on spreading its tentacles to French-speaking West African countries like Senegal, Cameroon and Ivory Coast.
Mrs Mbogo says there is a huge growth potential in west Africa, where re-insurance premiums are estimated at about Sh88 billion yet it is served by only three re-insurers.
However, there will be downscaling in loss-making regions like Asia and Middle East. In the same vein, the corporation announced that it would avoid marine business, partnership with cedants to develop new products, reduce management expense/loss ratios to sustain profitability.
Company pre-tax profit after right-sizing costs was up 22 per cent from Sh796 million realised in 2006 to Sh966 million. Pre-tax gains were gnawed by a voluntary staff retirement programme, which cost the corporation Sh197 million.
The exercise was meant to reduce operating costs.
Total assets grew by 14 percent from Sh12.9 billion to Sh14.7 billion over the year. Shareholders' funds increased by 15 percent from Sh6.3 billion in 2006 to Sh7.3 billion in the year under review.
Profit after tax rose 35 per cent from Sh539 million to Sh729 million.
Investment income increased by 25 per cent to Sh939 million from Sh753 million reported a year earlier. Mrs Mbogo said growth in the investment income was due to the increase in rental income, enhanced rent collection, prudent asset allocation and the improved collections from cedants.
The corporation announced plans to improve Information Technology department, which will focus on the purchase of financial and document management systems.
Mrs Mbogo said the reinsurer continues to implement other initiatives meant to ensure steady growth and efficiency.
Kenya Re shareholders are expected to approve the first and final dividend of Sh0.36 per share during the coming annual general meeting.
Be the first to Write a Comment!
Copyright © 2008 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
