Kenya Re announces 50pc rise in dividends
Kenya Reinsurance Corporation (Kenya Re) has announced a 50 per cent increase in dividend per share from Sh0.2 in 2022 to Sh0.3 in 2023 following impressive profit growth.
During the year ended December 2023, the reinsurer recorded a profit after tax of Sh4.97 billion in 2023 up by 42 per cent from Sh3.51 billion in 2022. Profit before tax stood at Sh7.03 billion.
Net investment and insurance result rose from Sh5.78 billion realised in 2022, a 42 per cent hike to stand at Sh8.19 billion revealing the company’s investment drive to attract new business across Africa, Middle East and Asia.
Group Managing Director, Hillary Wachinga attributed the good performance to prudent underwriting (practices for both premium and claims), diversification in strategic regions and product lines and favourable macro – economic environment and product investment decisions. “Our outstanding financial performance in 2023 reflects our commitment to delivering value to our shareholders and maintaining our position as a leading reinsurer in Africa. Our investors will receive one bonus share for every share held,” he said in a statement.
According to the trading results, corporations asset base also reported an increase by 15 per cent from Sh57.45 billion in 2022 to Sh65.98 billion in 2023, while shareholder’s funds increased by 18 per cent from Sh40.9 billion in 2022 to Sh48.17 billion in 2023. “The increase in the asset base was mainly attributable to the increase in investment in associate by Sh2 billion, increase in government securities by Sh1.1 billion and increase in deposits with financial institutions by Sh4.35 billion,” Wachinga said.
Shareholders funds
He added that the growth in the shareholders funds was as a result of increase in the retained earnings by Sh4 billion and increase in the translation reserves by Sh3 billion.
Wachinga noted that the financial overview of the group continues to deliver positive results to shareholders and has maintained a good performance despite the challenging business environment experienced during the year.
The key performance drivers that are responsible for positive financial state of the organisation include, aggressive collection of the reinsurance receivables and real time market intelligence which guided the group’s response to market changes and the uptake of investment opportunities.
In the course of its business operations, the group says it faces key threats in meeting its business objectives.
Among these are market risk exposures from its investment activities which arise due to reduced earnings on deposits with financial institutions due to interest rate capping which was repealed in November 2019, erratic prices of quoted equities and foreign exchange losses from underwriting operations in diverse regions with different currencies.
The group also faces stiff competition both in its local and international markets. There has been increasing cases of domestication of reinsurance business in some key markets and setting up of national reinsurance in countries where there were none.
Other challenges are mergers and acquisitions, increasing retention capacity of direct underwriters reducing reinsurance premiums and creation of captive reinsurance companies which are new entrants in group’s target markets, unfavourable changes in legislation in some markets and price undercutting amongst competitors.
