Kenya Re-insurance Corporation has recorded an increase in after-tax profit in the half-year period ended June 30, helped by growth in premiums and investment returns.
The NSE-listed firm posted a 4.2 per cent rise in net profit to Sh1.24 billion compared to Sh1.19 billion in a similar period last year.
It defied a 36 per cent surge in reinsurance claims from local and foreign operations during the period to Sh2.1 billion from Sh1.5 billion.
"We experienced high severity claims, among them the Jomo Kenyatta International Airport fire claim and the Thailand flood claim," managing director Jadiah Mwarania said on Friday.
"We settled part of the claims in the first half of 2014. However, new risks continue to emerge in the market place hence we are focusing on product innovation to sustain good performance and increase shareholders' wealth."
As at June 2014, gross premiums written stood at Sh4.9 billion up from Sh4 billion, a 22.5 per cent growth compared to a year ago. The net earned premiums increased 23.2 per cent to Sh4.15 billion up from Sh3.37 billion during the review period.
In the six months, investment income grew by 7.1 per cent to Sh1.36 billion from Sh1.27 billion in June 2013.
Mwarania said Kenya Re has diversified its products to capitalise on the upcoming oil and gas sector by re-insuring energy companies, in addition to re-takaful (Sharia-compliant reinsurance).
"The need for energy reinsurance is a reality in the markets we operate in. We have already acquired an energy retrogression protection that has enabled us to provide capacity for oil and gas treaty and facultative reinsurance to ceding companies," he said.
Kenya Re launched a re-takaful window in 2013 and intends to increase capacity due to favourable response in the market.