Kenya Re leads in franchise value, Sanlam Kenya trails – Cytonn

May 8, 2017
Cytonn Investment Analyst Caleb Mugendi/COURTESY

, NAIROBI, Kenya, May 8 – A report by Cytonn Investment puts Kenya Re Insurance in the top as far as franchise value rankings are concerned, while Sanlam Kenya has been ranked last.

Dubbed ‘Kenya’s Listed Insurance Companies analysis report’, the report put Jubilee Holdings second, Britam Holdings third and CIC Group fourth.

Investment Analyst Caleb Mugendi said Kenya Re’s performance was backed by a low combined ratio as well as a high solvency ratio.

On the other hand, Sanlam’s performance was attributed to poor return on tangible equity, low solvency ratio and high reserve leverage among other factors.

“CIC dropped from top position to position 4, affected by a poor return on average tangible equity, low levels of diversification and high reserve leverage,” reads the report.

As far as rankings on total potential returns is concerned, Liberty Holdings was the leader in intrinsic value ranking, followed by Britam Holdings with total potential returns of 21.3 per cent and 20.8 per cent respectively.

Despite low penetration of insurance in the country, – 3 percent compared to Africa’s 3.5 per cent – , Kenya ranks high in premium growth globally and is leading in sub-Saharan Africa.

Additionally, the report notes that the country ranks at par with global players in most areas. “However, in terms of combined ratio, we are worse off, showing the poor profitability of the core insurance business in Kenya,” says the report.

Last year, Life business premiums was noted to have continued outpacing general business. The growing middleclass has also seen growth in medical and education premiums.

Cytonn Investment reports to have analysed all listed insurance companies while compiling the data.

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