Kenya Reinsurance Corporation (Kenya Re) has announced a strategic expansion plan aimed at strengthening its presence in the global life reinsurance market.
The company, which has traditionally focused on general reinsurance, anticipates a 50% growth in premiums from the life reinsurance sector within a year following the launch of a dedicated unit targeting long-term clients in Africa, the Middle East, and Asia.
Expanding Horizons in Life Reinsurance
On Wednesday, Kenya Re launched its international life reinsurance operations, allowing it to extend its services beyond general reinsurance.
This move opens opportunities to cater to both individual and corporate clients across 82 markets, significantly increasing the reach of its business.
Currently, the company’s revenue from long-term business, including individual and group life reinsurance, stands at Ksh2.58 billion,just 15.2% of its total revenue of Ksh19.57 billion for the year ending December 2023. This highlights the current dominance of short-term reinsurance in its portfolio.
With a focus on diversifying its revenue streams, Kenya Re seeks to deepen its market share in life reinsurance by expanding beyond Kenya’s borders.
At present, Côte d’Ivoire is the only international market where it operates a life reinsurance business on a small scale.
READ ALSO:
Breaking Barriers: Soraya Hakuziyaremye Becomes Rwanda’s First Female Central Bank Governor
Rising Demand and Strategic Opportunities
Kenya Re Managing Director, Hillary Wachinga, emphasized the growing demand for life reinsurance services among its existing clientele.
The company has been receiving numerous requests from its general reinsurance clients for life insurance solutions, which prompted the launch of the dedicated unit.
Emerging markets in Africa, Asia, and Latin America are experiencing strong growth in life insurance penetration, providing a fertile ground for Kenya Re to tap into.
“We are confident that once we expand our life reinsurance services beyond Kenya, we should be able to increase our revenue from this line by 50% within the first year,” said Mr. Wachinga during the launch.
The company plans to leverage its existing relationships in general reinsurance to cross-sell life reinsurance products, capitalizing on the growing demand in key markets.
Diversification and Risk Mitigation
Kenya Re is strategically positioning itself to reduce exposure to risks in any single market by expanding its product offerings and geographical reach.
The reinsurer, which is 60% owned by the Kenyan government, currently serves over 80 markets through its headquarters in Kenya and three subsidiaries in Côte d’Ivoire, Zambia, and Uganda.
This diversification strategy comes on the back of impressive financial growth. For the year ending December 2023, Kenya Re’s net profit surged by 41.6% to Ksh4.97 billion from Ksh3.5 billion.
This growth enabled the company to increase its dividend per share to Ksh0.30, totaling Ksh839.9 million, compared to Ksh0.20 (Ksh560 million) the previous year.
Return to India and New Expansion Plans
In addition to its life reinsurance expansion, Kenya Re is set to re-enter the Indian market by establishing a liaison office.
The company had previously exited India’s crop insurance sector after incurring significant losses three years ago but now sees new opportunities in the country’s rapidly expanding insurance industry.
The firm aims to generate Ksh1.5 billion in revenue from India’s fire, engineering, and marine insurance sectors.
Furthermore, Kenya Re plans to set up a subsidiary in Tanzania and a branch in India within the next four months. These moves align with its broader international growth strategy to strengthen its footprint in Africa, the Middle East, and Asia.
The company’s expansion strategy has already yielded positive results, with a 14% increase in profits to Ksh4.9 billion ($37.9 million) for the year ending December 2023. Kenya Re attributes this success to regional expansion and improved underwriting performance.
READ ALSO:
How Ghana Plans to Finally Launch the e-Cedi in 2025 After Years of Setbacks
Kenya Re’s Growth Strategy
Kenya Reinsurance Corporation (Kenya Re) continues to strengthen its position in the reinsurance market, competing with major players like Africa Re and ZEP-RE.
As it expands its life reinsurance business, clients seeking more information can access Kenya Re contacts through its official communication channels.
The company remains a key player in the Kenya Re insurance sector, offering both general and life reinsurance solutions. Policyholders and partners can also track Kenya Re claims processes efficiently through its digital platforms.
With its recent financial growth, the reinsurer has announced Kenya Re dividends 2024, reflecting strong profitability and shareholder value.
Competing in New Markets
In Tanzania, Kenya Re will enter a competitive market dominated by local and regional players. Meanwhile, in India, it will target one of the world’s fastest-growing insurance markets, leveraging its expertise in reinsurance to offer tailored solutions.
Kenya Re’s expansion beyond Kenya is expected to enhance its market position and revenue streams while mitigating risks associated with dependence on a single market.
With the new life reinsurance unit and a clear strategic vision, the company is positioned to solidify its standing as a leading reinsurer not just in Africa, but on the global stage.
