The Kenya Reinsurance Corporation (Kenya-Re) has commenced plans to vacate the Indian market over rising losses stemming from agriculture underwriting business.
In the half year period to June 30, 2023, the reinsurer saw its net earned premiums decline 33.5pc from Ksh 9.8 billion reported last year to Ksh 6.5 billion on account of a Ksh 2 billion haircut it took to ease further losses according to chief executive officer Dr Hillary Wachinga.
“We are doing a strategic withdrawal from the Indian market where we suffered heavy losses in agriculture business and if you look at our half year performance, you will notice we have taken a haircut in premiums because we have forgone Ksh 2 billion premiums from the Indian market,” said Dr Wachinga.
Due to bad weather which affected India’s agriculture sector, Kenya-Re saw it underwriting for the sector fall to Ksh 500 million from Ksh 2.5 billion reported last year.
However in a bid to protect its bottom-line from further losses, Dr Wachinga says the reinsurer is now focusing on solidifying and expanding underwriting business in Africa with the coming of the African Continental Free Trade Area (AfCFTA).
“We intend to really support the subsidiaries that we have in Africa by opening new satellite offices targeting big economies specifically the Democratic Republic of Congo (DRC) and South Africa and support our Abidjan and Lusaka offices,” he added.
During the period under review, the firm net profits rose marginally to Ksh 904 million from Ksh 832 million it earned last year.
Total income on the other hand reduced by 26pc, from Ksh 11.8 billion to Ksh 8.8 billion in the first six months of this year.
Kenya-Re also saw its net claims paid out during the year fall from Ksh 6.5 billion to Ksh 4.2 billion, a 35.4pc drop.
The insurer also saw its operating expenses reduce by 72pc, to Ksh 300 million from Ksh 990 million as asset base increased from Ksh 70.1 billion to Ksh 72.8 billion, a 4pc growth.
