ZEP-RE Profit Soars Despite Global Economic Challenges

By Soko Directory Team / May 27, 2016




ZEP-RE (PTA Reinsurance Company) grew significantly in the financial year ending December 31, 2015, recording Ksh1.99 billion (USD19.9 Million) in net profit despite the harsh economic environment.

Speaking at the Company’s 25th Annual General Meeting held in Mombasa, ZEP-RE’s Board Chairman Mr. William Erio said: “The year 2015 started with great promise but intervening negative pressures namely a slowdown in China (a key trading partner of the COMESA region), a fall in global commodity prices, uncertainty in the Eurozone (due to the Greek debt crisis) and a strengthening dollar turned the economic environment on its head. The global economic situation negatively impacted economies of the region resulting in slowdowns, reduced consumption and a weakening of local currencies against the dollar.”

In addition to the economic slowdown, the Company had to deal with the effects of  two major earthquakes in Nepal, one of its major markets, which resulted in gross losses which amounted to Ksh2.3 billion (USD23 million) while net retained losses stood at Ksh400 million (USD 4 million).

“The fact that ZEP-RE withstood such a catastrophe is testament to the Company’s strong financial position and a versatile risk management system that includes an effective reinsurance programme,” the chairman added.

Commenting on the company’s performance, the Secretary General of the Common Market for Eastern and Southern Africa  (COMESA), Mr. Sindiso Ngwenya said the company had remained true to its developmental role as outlined in its founding objectives.

“I am happy to note that ZEP-RE’s performance is attracting investors from within and outside the African continent. This can only bode well for the company and its growth goals,” Mr Ngwenya said.

Good performance

Gross written premiums rose by 10.6 percent to Ksh13.8 billion (USD 138.7 million) in 2015, built on the continued and systematic implementation of the company’s strategy of taking service closer to its customers.  

The total income (net earned premium, investment income, commission earned and other income) for the year 2015 reached the highest level in the company’s history. Total assets grew by 21.4% to Ksh31.4 billion (USD310 million) and total equity rose by 18.1% to Ksh16.9 billion (USD169 million) over the 2014 results.

“We have recorded growth in our key markets of Kenya, Uganda, Sudan and India supported mainly by growth in infrastructure development in those markets,” ZEP-RE Managing Director Mr. Rajni Varia.

Tied to this demand for support of infrastructure development by ZEP-RE’s member countries, is the company’s growing international reputation in underwriting property, casualty, life, marine and motor businesses.

The company currently writes over 4000 treaties from 500 companies in 50 countries drawn from Africa, Middle East, and the Indian Sub-continent.  In Eastern and Southern Africa, the company enjoys a greater goodwill as demonstrated by the 10% mandatory cessions being offered by governments of Kenya, Tanzania, Zambia and Uganda.

“Our business in the region is not limited to the 10% mandatory cessions as shown by increased additional gross premium we underwrote in Uganda and other markets in 2015,” said Mr. Varia.

The company expects to maintain strong growth in 2016 despite fall in oil & commodity prices and terrorism threats. This growth is expected to be driven mainly by a combination of factors including infrastructure investment and the expanding service sector in most member countries.

“The renewed business confidence globally coupled with a resilient and steady regional economy should help us consolidate and increase business currently underwritten in our core markets. This should put the ZEP-RE in good stead to achieve its business goals and objectives for the year,” Mr. Varia said.

Key Financial Trends: 2009 – 2015

 2009201020112012201320142015
Gross Premium Written55,748,911            59,843,116           63,536,571         81,714,820      100,181,402         125,437,018         138,755,947
Net Written Premiums  44,266,616            46,042,768           49,846,359         66,307,584        83,964,961         105,888,455         116,235,351
Net Earned Premiums  40,214,408            44,361,208           46,489,807         60,683,391        77,695,433            96,367,104         110,275,997
Investment & other Income    8,253,469            10,117,026           11,083,593      15,255,819        14,921,584        17,619,892        18,875,457
Total Income  48,467,877            54,478,234           57,573,400         75,939,210           92,617,017         113,986,996         129,151,454
Claims Incurred  23,437,454            27,097,758           26,103,374      30,355,413        40,667,775            51,190,046        59,786,689
Commisions & other operating expenses  18,602,983            22,133,214           22,693,198      33,902,114        36,586,089        44,091,207        49,403,820
Profit for the year    6,427,440              5,247,262             8,776,828         11,681,683           15,363,153            18,705,743            19,960,945
Dividends Paid & Capitalized    1,200,000              1,311,000         1,573,200        2,359,800         3,226,200          4,115,300          4,500,000
Total Assets  87,128,548         103,110,370        130,337,123    154,088,372      201,843,403      255,731,818      310,496,459
Total Equity  44,474,180            49,987,272           66,656,019      78,774,839      105,728,865      143,586,785      169,683,104

 



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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