Agency accords Kenyan insurer positive rating

Tuesday, July 14th, 2020 00:00 |
Kenya Re Managing Director, Jadiah Mwarania.

Lewis Njoka @LewisNjoka

Global Credit Ratings (GCR), a Johannesburg-based agency, has affirmed Kenya Re’s national scale financial strength rating of AA+ with the outlook accorded as stable.

It attributed Kenya Re’s favourable rating to the reinsurer’s strong risk capitalisation and similar strength in liquidity and business profile. The corporation’s outlook was also rated as stable.

“Capitalisation was assessed within the very strong range, prominently reflecting Kenya Re’s healthy liquidity as a representation of credit strength, stimulated by receivable collections following implementations of cash and carry regulations in the markets,” it said.

As such, the agency added, GCR CAR was maintained reflecting a sizeable capital base relative to the growing quantum of insurance, market and credit risks. 

Investment portfolio

Cash and equivalents grew by 20 per cent to stand at Sh7.4 billion in financial year 2019 up from Sh6.2 billion financial year 2018, while majority of investment portfolio was placed in low risk liquidity assets standing at 55 per cent financial year 2019 up from 53 per cent of portfolio in financial year 2018.

Kenya Re Managing Director, Jadiah Mwarania, attributed the re-affirmed national scale financial rating to strong risk adjusted capitalisation, markets diversification, low risk investment portfolio, a diversified business portfolio, prudent underwriting and effective expenses management among other factors.

According to GCR, Kenya Re has a strong business profile that has helped it achieve a sizeable domestic market share representing 47 per cent of a well-diversified portfolio. 

The reinsurer with subsidiaries in strategic locations plans to expand into the Western and Southern African regions, as well as strong management commitment on expansion endeavors has cemented the Corporation’s footprint in the reinsurance markets.

More on Economy and Policy