[2008-05-29]  Kenya Re boosts stake in regional secondary insurer
Kenya Reinsurance Corporation (Kenya Re) has invested KSh163 million in the PTA Reinsurance Company in line with its strategy to consolidate market shares while securing high profit margins. PTA Reinsurance Company (ZEP-RE) is a specialised institution of the Common Market for Eastern and Southern (Comesa) established to service and develop the needs of the insurance and reinsurance industry within the sub-region. “In our financial results last year, KSh 68 million of the profits we announced was from PTA Re. We will in future consider increasing our current stake in PTA Re from 22 to 30 percent,” said Eunice Mbogo, Kenya Re’s managing director. The investment strategy will also see the corporation embrace new business opportunities in commercial mortgage financing and secondary market trading in bonds. Kenya Re is also set to dispose of its idle and low yielding assets like the Mombasa Plaza, which is being sold at KSh190 million. The corporation will also give up some office space for rent. The corporation said it is also looking for a partner to develop a transit hotel at the Jomo Kenyatta International Airport (JKIA) before the end of the year. Kenya Re has already allocated land for the purpose and is currently reaching out to potential partners to set up the facility. “We believe there is a dire need for a transit hotel at JKIA. The facility will not only give service to our people and tourists but will also earn us some revenue,” Ms Mbogo said.

Huge potential
Kenya Re recently announced its intention to set up offices in West Africa to enhance its business there. It has committed KSh10 million for this purpose. “There is a huge potential for growth in the West African market whose re-insurance premiums are estimated at about KSh88 billion, yet it is served by only about three re-insurance companies,” she said. Regional markets have become major business focus for the reinsurer because they bolstered its pre- tax profits beyond the KSh1 billion mark in the financial year ended December 31, 2007. The company revenues were boosted by new business investments in Seguros of Angola, UAP Uganda and New Sudan Insurance Company. The reinsurer also improved its dealings with brokers, including Ashford Page Gems of London. The corporation said strategies to sustain profitability and growth will also include aggressive marketing to penetrate new markets and increase the existing market share, prudent underwriting; analysing the business and scaling down in loss making regions in Asia and the Middle East.

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