NAIROBI, Kenya, Apr 29 – Kenya Reinsurance (Kenya Re) has announced a 76 percent increase in after tax profit for the year ended 31 December 2008, earning Sh1.48 billion compared to Sh837 million in 2007.
Kenya Re Managing Director Eunice Mbogo attributed the rise in profits to the strategic initiatives implemented by the board over the last two years geared at achieving sustainable growth and efficiency.
Among these initiatives include penetration to French speaking countries, aggressive marketing to tap new markets and partnering with cedants to develop new products,” said Ms Mbogo.
She however indicated that the Pan African re-insurer came across some unexpected challenges in their effort to set up office in West Africa which caused some delays.
“A taxation problem arose as regards the person who was to set up the liaison office there which took some time for us to sort out,” she said.
Within the period, the company’s assets grew from Sh12.9 billion to Sh 13.6 billion in 2008 translating into a five percent growth.
Shareholders’ funds increased by 10 percent to stand at Sh8 billion from Sh7.2 billion realised in 2007.
“And it’s with this in mind that the board has recommended a dividend payout of 50 cents for every share held,” Ms Mbogo said.
Underwriting profit increased by 413 percent from Sh19 million to Sh97 million for the period under review.
The growth was attributed to prudent underwriting and reduction in management expenditure following a staff rationalisation exercise concluded early last year.
Ms Mbogo said investment income went up by 6 percent despite the prevailing economic downturn as a result of the company’s diversified investment portfolio mix.
“Declining performance of the Nairobi Stock Exchange (NSE) and the effects of the global financial crisis however saw returns in the company’s equity portfolio go down marginally,” she pointed out.
Meanwhile Ms Mbogo has confirmed that plans are still underway to build an airport hotel as had been announced last year.
“A new framework on the Private-Public Partnership has been put in place and so we are studying it to see how best to go about this project because it’s our intention to partner with a private company,” she said.
She further revealed that Kenya Re was ready to provide commercial mortgages to the public at an interest rate of 14 percent on a reducing balance.