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| Jadiah |
By VICTOR JUMA
In Summary
The firm has been keen on expanding its re-insurance business in the continent, taking premiums from primary insurers with whom it shares risks.
Kenya Re has bought a minority stake in Africa Trade Insurance Agency (ATI), securing an additional revenue stream from the fast-growing continental underwriter.
The Nairobi Securities Exchange-listed firm last month invested $1 million (Sh87.5 million) in ATI, taking a 0.55 per cent stake in the multinational that covers political and trade risks.
The deal will see Kenya Re earn dividends from ATI besides deepening its existing partnership with the institution it has structured joint insurance policies against bond defaults and political violence.
"This partnership will create a platform through which we can strengthen our capacity to reach these untapped and potential markets in Africa," said Jadiah Mwarania, Kenya Re’s chief executive.
The firm has been keen on expanding its re-insurance business in the continent, taking premiums from primary insurers with whom it shares risks.
Besides its Kenyan head office, Kenya Re has an office in Ivory Coast from where it serves the French-speaking insurance market of West Africa.
The investment in ATI gives it an opportunity to access more deals in markets where it has previously served indirectly. ATI’s headquarters is in Nairobi, besides having offices in Tanzania, Uganda, and Zambia.
READ: Kenya Re now third biggest National Bank shareholder
It does business in more than 10 African countries, including those that form the bulk of its shareholder base. It plans to significantly expand its footprint on the continent in the medium term.
The multinational is seeking to recruit new shareholder states from the Economic Community of West African States (Ecowas), raising more capital and entering new markets.
"Our main focus currently is with the Ecowas bloc, and we expect capital of $100 million (Sh8.7 billion). This will be in the next three to five years," ATI said in a statement.
ATI’s business is concentrated in Kenya where its gross exposure in December stood at $301.2 million (Sh26.2 billion) or 34.5 per cent of the total $871.5 million.
"As a shareholder, Kenya Re should expect to directly benefit from ATI through dividends as well as sharing risks in the region," said ATI’s chief executive George Otieno.
Source: Business Daily
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