- Company introduced political risk cover after 2007 violence
- Full-year profit climbed 9.2% as net premiums increased
Kenya Reinsurance Corp., the country’s only publicly traded reinsurer, expects increased political risk linked to presidential elections in the East African nation next year to boost earnings, Chief Executive Officer Jadiah Mwarania said.
Kenya is scheduled to hold the vote in 2017. While the previous ballot in 2013 went peacefully, a disputed election in 2007 resulted in two months of violence in which at least 1,100 people died and another 350,000 were forced to flee their homes.
“We expect to gain from elections because we expect businesses will get policies for political risk,” Mwarania said in an interview Wednesday in the capital, Nairobi.
Kenya Re, as the company is known, introduced political risk cover in Kenya in 2009, after Mwarania said businesses lost an estimated 17 billion shillings ($170 million) in the 2007-08 post-election violence. The cover gained popularity after an attack by al-Qaeda-linked militants on the upmarket Westgate mall in Nairobi in 2013, which left at least 67 people dead. That siege cost the industry as much as 10 billion shillings, including claims from individual business tenants who lost stock, according to the Insurance Regulatory Authority.
“Businesses have learnt that it’s possible to lose your investment and business out of a political event,” Mwarania said.
Kenya Re posted a 9.2 percent increase in full-year profit to 3.43 billion shillings, as net premiums grew to 11.7 billion shillings from 10.3 billion shillings. Investment income jumped 17 percent to 3.04 billion shillings.
The company is also banking on its increased market reach that spans 62 countries in Africa, Asia and the Middle East, to boost earnings by as much as 17 percent next year, Mwarania said. In addition to Kenya Re’s operations in Ivory Coast, which serves the West African and francophone markets, it established a subsidiary in Zambia to serve southern African markets and plans to open another office to serve the North African market.