Kenya Re targets southern Africa with Zambia office

By DAVID HERBLING

Kenya Re has announced plans to set up a subsidiary in Zambia by the end of the year to cut reliance on the local market and diversify revenue streams.

The Nairobi Securities Exchange-listed re-insurance firm said the Lusaka office would be a regional hub to serve the southern African markets such as Botswana, Lesotho, Namibia, South Africa and Swaziland.

This will be Kenya Re’s second operation outside the country after opening of its operations in Abidjan, Ivory Coast, which serves the West African and Francophone markets.

“We plan to set up in Lusaka to serve the southern Africa market by end of the year,” said Kenya Re managing director Jadiah Mwarania last week after announcing the re-insurer’s half-year results.

“We have hired a consultant to advise on issues such as capital and regulatory requirements.” Kenya Re said it would fund the unit from its internal cash reserves.

The Pensions and Insurance Authority — Zambia’s insurance industry regulator — has said it plans to increase ten-fold the minimum capital requirement to set up an insurance firm to ZK10 million from the current ZK1 million Kwacha.

Kenya in 2010 increased the minimum required paid up capital to Sh300 million from Sh100 million for short-term insurance underwriters; Sh150 million (from Sh50 million) for long-term underwriters and Sh450 million for composite insurance companies.

The firm’s net profit stood at Sh1.24 billion in the six months to June compared to Sh1.19 billion in the same period a year earlier, a marginal growth of 4.6 per cent. Its gross written premiums rose by a fifth to Sh4.9 billion from Sh4 billion in the period under review.

Source: Business Daily