Kenya Re To Exit Indian Market After Huge Loses
Kenya Reinsurance Corporation intends to withdraw its operations from the Indian market due to escalating losses. The Indian market contributes approximately 32% of the company’s gross premiums, positioning it as the second-largest market for the corporation, following Kenya. Hillary Maina Wachinga, the Managing Director, explained that the losses incurred by underwriters in India are primarily attributed to challenges within the agricultural sector.
Significant Changes Expected as Kenya Reinsurance Corporation Shifts Focus Away from Indian Market
Kenya Reinsurance Corporation is poised for a substantial shift in its business landscape as it plans to curtail its operations in India.
This strategic decision will have a considerable impact on the company’s geographical distribution of premium sources.
According to a report released last year by South African credit rating firm Global Credit Rating, India emerged as Kenya Re’s second-largest contributor to business, accounting for 32% of its gross premiums.
This ranking positioned India just behind Kenya, which generates 38% of the company’s premiums.
The upcoming reduction in business activities in India will lead Kenya Re to deepen its reliance on the domestic market, where it is mandated to obtain 20% of premiums from primary underwriters.
Despite this transition, Kenya Re has actively pursued opportunities to expand its business across various markets, including other African countries.
In financial performance news, Kenya Re reported a net profit of Sh904.1 million in the first half of the year ending June.
This figure reflects an impressive growth of 8.6% compared to the Sh832.1 million recorded in the same period the previous year.
This positive outcome was driven by a significant decrease in costs, encompassing both operating expenses and insurance claims payouts.
Notably, net claims and benefits experienced a notable drop of Sh2.3 billion, settling at Sh4.1 billion. Simultaneously, operating and miscellaneous expenses also contracted, decreasing from Sh997.3 million to Sh275.3 million.
