Kenya Re profit declines by 11pc

April 30, 2010
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, NAIROBI, Kenya, Apr 30 – The recovery signs exhibited by the local economy continue to present hope to many companies that have expressed confidence of posting favourable financial results this year.

Kenya Reinsurance Corporation Acting Managing Director Jadiah Mwarania said they are targeting a double digit growth in their insurance premiums this year supported by aggressive marketing that is expected to increase their market share.

“Our target for 2010 is Sh4.3 billion so we are targeting a minimum of 10 percent growth. We envisage to grow our market share by getting more business in existing countries in Africa, Middle East and Asia,” he said. The firm where the government owns a 60 percent stake has a footprint in 23 African countries and 11 countries in the Middle East and Asia.

He added that they planned to make more investments but with a balance between risk and return, capitalise on the company’s strength and also the management of their operation costs in a bid to enable them survive in the challenging economic environment.

Speaking after an investor briefing where the reinsurance firm announced an 11 percent decline in profit after tax to Sh1.3 billion for the year ended December 31, 2009, the MD attributed the dip largely to an increase in the amount of claims that the company had to settle during the year.

“There was a growth from Sh1.4 billion to Sh1.8 billion in the claims incurred because we never valued our business for a period of three years,” he said while explaining that in the revaluation of their assets in 2009, they only factored in Sh310 million for a one year period compared to the three year period which was factored in 2008.

The re-insurer’s total assets however increased by eight percent to stand at Sh15 billion during the year as did the shareholders funds which rose to Sh9.10 billion.

Despite the decline in profits, the board of directors however recommended a dividend payout of Sh0.50 per share which will be subject to approval by the shareholders during the Annual General Meeting in mid June.

Chairman Nellius Kariuki sought to assure shareholders that the company was well positioned to post impressive growth in the future. While steering clear of the legal tussle with immediate former MD Eunice Mbogo who has sued the firm over what she termed as wrongful dismissal, the Chairman expressed the board’s and management commitment to drive the re-insurer to greater heights in the future.

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