Meet new Kenyan insurer securing Ugandan insurance companies

Reinsurance is insurance for insurance companies. It's a way of transferring some of the financial risk insurance companies assume in insuring cars, homes and businesses to another insurance company, the reinsurer.

Kenya Re, which has two other subsidiaries in Zambia and Cote d’Ivoire hopes to not only strengthen its footprint in Uganda but also reinforce its commitment to providing unparalleled services in East, West, Central, and Southern Africa.

Objectives

According to the company's Managing Director Hillary Wachinga, the company is looking to boost domestic reinsurance services to ease dependence on foreign reinsurance.

“Our presence in Uganda serves a vital purpose of bridging the gap of missing reinsurance services domestically. We want to partner with local insurance companies to reduce the reliance on international reinsurance which often comes at a higher cost,” he said, adding, “By reinforcing our local presence, our goal is to foster self-sufficiency in the reinsurance sector and contribute to Uganda’s economic growth by retaining value within the country.”

Wachinga has said that Uganda’s vibrant economy and dynamic insurance sector was an attractive suitor for Kenya Re’s business to flourish as the market experienced significant growth over the years owing to an increasing middle class, increased public awareness, and infrastructure development.

Background

Data from the Insurance Regulatory Authority (IRA) of Uganda shows that the industry recorded a 19% growth in gross written premiums to Shs 1.32 trillion. However, insurance penetration remains less than 1%, one of the lowest in the East African region.

Kenya Re was granted a licence to set up a subsidiary in Uganda in 2019 but didn't start transacting until a year later.

The subsidiary will deal in both the company’s general and life insurance business in line with its strategic objectives within Uganda where general insurance accounts for more than 60% of the market with life insurance accounting for close to 34% of the market.

IRA welcomes move

IRA Chief Executive Officer Ibrahim Kaddunabi Lubega welcomed Kenya Re into the Ugandan market saying, it will boost the growth of the country’s insurance market. He said there is no reason for insurers to seek reinsurance services abroad now that the country has strong reinsurance firms.

Other reinsurance companies operating in Uganda through liaison offices include ZEP Re, PTA Re and Swiss Re.

Kenya Re performance

Last year, Kenya Re recorded a 15% growth in Profit after Tax to Kshs3.62 billion for the year ended 31 December 2022 citing continued improvement in the reinsurance portfolio, enhanced customer-centricity, and intensified market engagements to improve visibility.

Other factors that contributed to the performance include diversification of the portfolios and markets, speedy processing of fully supported claims, inculcating of positive culture to support service delivery, enhanced partnership with cedants and intermediaries, and market development and segmentation.

The corporation’s gross written premiums grew by 23% to Kshs24.98 billion while net earned premiums grew by 16% to Kshs22.15 billion.

Total revenues went up 15% to Kshs 26.68 billion, supported by growth in investment income and gross premiums written.