Kenya Re-Insurance Company has maintained the top position in the franchise score category
This comes about on the back of a strong combined ratio and solvency ratio, an indication of better capacity to generate profits from its core business.
According to the Kenya Listed Insurance Sector FY’2016 Report by Cytonn Investments, Britam moved one rank up from position 3 to position 2 as a result of an improved loss ratio and reserve leverage while CIC Group dropped three positions to rank 4th from top position. This is said to be as a result of declined profitability recording a return on tangible equity (ROaTE) of 2.5 percent way below the industry average of 10.9 percent.
Sanlam, on the other hand, retained its bottom position ranking 6th in both the total return score category and franchise score category.
The report, which was themed Operational Efficiency and Product Innovation key to Growth of the Sector in an era of Increased Regulation, was aimed at giving a view on which insurance firms are most attractive and stable for investment from a franchise value and from a future growth opportunity perspective.
On the back of a growing and stable economic environment in Kenya, the country’s insurance sector is said to have experienced robust growth over the years to become a key part of Kenya’s financial services sector, with the financial services sector in Kenya currently contributing 6.2 percent to Kenya’s GDP, from a 3.5 percent contribution 10-years ago.
Some of the factors that the Kenyan insurance sector has benefited from included convenience and efficiency through insurance firms adopting alternative channels for both products distribution and premium collection such as Bancassurance and improved agency networks, advancement in technology and innovation making it possible to make premium payments through mobile phones,