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Kenya Reinsurance Corporation posted a 52% rise in profit before taxation. The profit before taxation for the period ended 30th June 2020 stood at Ksh.2.09 billion compared to Ksh.1.37 billion for the period ended 30th June 2019. Gross written premium increased by 2% from Ksh.8.86 billion to Ksh.9.07 billion compared to the same period in FY2019.
The higher performance is attributable to the following factors: Fire recorded the highest gross premium of Ksh.2.59 billion in 2020, an increase from Ksh1.51 million in 2019, a 71% growth. Gross premium from Bond grew by 58% from Ksh.91 million in 2019 to Kshs. 144 million in 2020. Life business grew by 17% from Ksh.776 million in 2019 to reach Ksh. 909 million in 2020.
Non-Life business grew by 2% from Ksh.8.03 billion in 2019 to Kshs. 8.16 billion in 2020. Most business lines’ growth was positive compared to the same period in 2019, the overall growth stood at 2% attributed to aggressive fair sourcing of business.
The positive results come a month after the Corporation’s national scale financial strength rating was affirmed by the Global Credit Ratings agency (GCR).
The AA+(KE) rating was attributed based on the strong risk capitalization and similar strength in liquidity and business profile. The shareholders’ funds increased from Ksh.31.9 billion as at 31st December 2019 to Kshs.33.1 billion as at 30th June 2020 which is an increase of 3%.
Cedant acquisition costs increased by 6% from Ksh.2.02 billion to Ksh.2.14 billion, giving a Commission’s ratio of 25% during the period. Investment income for the period under review stood at Ksh.1.905 billion which is 2% lower than the prior year (Ksh.1.945 billion), this is attributed to the effect of the COVID-19 pandemic which has significantly affected the investment environment.
“We are indeed pleased about our half year results thus far, the growth in profit is largely attributed to strong risk adjusted capitalization, markets diversification, low risk investment portfolio, a diversified business portfolio, prudent underwriting and effective expenses management among other factors.
The COVID-19 pandemic has slightly affected our investments income but we remain optimistic that we shall report positive results in the next half of the year,” said Kenya Re Managing Director, Mr. Jadiah Mwarania.
“The Corporation continues to consistently anchor its business on five strategic pillars that have helped the Corporation make major strides in reinsurance business. These pillars are financial performance, business development, business process improvement, enhanced risk management as well as people and culture,” he added.
The global economy has faced a slowdown due to the ongoing pandemic. More businesses including reinsurance business have turned to innovation and digitized product solutions to keep business afloat and to ensure business continuity.
The reinsurance market must also focus on improving operational efficiency, boosting productivity, and lowering costs with new technology and talent transformations in the wake of the pandemic. The Corporation continues to implement relevant strategies to mitigate the impact of the COVID-19.
The Business Continuity Plan in place has quickly enabled adjustment to the disruptions to allow staff to work away from the office.
The Corporation has in place a robust Virtual Private Network (VPN) connectivity in place that allows staff to connect from anywhere and access all systems and resources they would normally access while at office. The Corporation is also optimally utilizing use of digital communication platforms including Microsoft Teams, Webex, WhatsApp messaging, emails and telephone calls to frequently keep in touch with the cedants/brokers and hence enhance visibility