Kenya Reinsurance Corporation, commonly known as Kenya Re has released the half-year financial results registering a decline in profits.
The company registered a drop by 24.1 percent in profits from 1.62 billion shillings at the same time in 2017 to 1.22 billion shillings for a period ending June in 2018.
The company has attributed the drop in profits on reduced earned premiums that reduced to 6.37 billion shillings, a 10.12 percent drop.
According to a statement released by the firm, the gross premiums written dropped by 16 percent for the period under review to 6.33 billion shillings from 7.5 billion shillings with the company attributing it to an overall loss across key markets in Ghana, India, Nigeria, Ethiopia, and Nepal.
Kenya Re is tasked with insuring the insurance companies which involves the ‘practice of insurers transferring portions of risk portfolios to other parties by some form of agreement to reduce the likelihood of paying large obligation resulting from an insurance claim.’
The company now has 160 insurance companies under its umbrella spread across 45 countries in Africa, the Middle East, and Asia.
Kenya’s insurance sector has been facing numerous challenges as penetration continues to dwindle over the years. In 2016, the insurance penetration in Kenya lost steam and stood at a three-year low of 2.73 percent from 2.88 percent in 2015.
The decline then was attributed to the decline in high nominal growth in the country’s GDP OF 14.3 percent from a nominal growth in gross direct premiums which stood at 13.2 percent.
Stats have shown that many Kenyans do not like talking up insurance services with the majority of them shying away because of the perception that insurance companies rarely pay claims on time with most of them not paying at all.
Most Kenyans have subscribed to the National Hospital Insurance Fund (NHIF) which is a requirement for every employee but open to individuals.