Kenya Reinsurance Posts 26% Decline in After Tax Profits to Kes 2.80 Billion For FY2020
Kenya Reinsurance Corporation (Kenya Re) has recorded a 5% decline in profits before tax to Kes 3.98 billion during the financial year ended 31st December 2020 compared to the Kes 4.18 billion recorded during the same period in 2019.
Profit after tax in the company stood at Kes 2.80 billion, a 26% decline compared to Kes 3.86 billion that was recorded during the same period in 2019. The decline was attributed to the economic strain caused by the COVID-19 pandemic, which saw the country experience a recession.
However, Gross written premiums in the re-insurance company grew by 6% from Kes 17.52 billion recorded in 2019 to Kes 18.54 billion that was recorded during the financial period ended 31st December 2020. The growth was attributed to the growth in net earned premiums which grew by 34% from Kes 15.53 billion in 2019 to Kes 20.85 billion in 2020
Kenya reinsurance recorded a 2% growth in investment income from Kes 3.71 billion to Kes 3.79 billion recorded during the financial period ended 31st December 2020. The company attributed the growth to the Corporation’s investment strategy to cushion them against the effects of the COVID-19 Pandemic.
Claims incurred during the financial period grew by 22% to Kes 13.52 billion, up from Kes 11.06 billion in 2019. Cedant acquisition costs increased by 30% from Kes. 4.09 billion posted in 2019 to Kes. 5.31 billion.
The company also recorded a decline in operating expenses by 4% from Kes. 2,043 million as of 31 December 2019 to KShs.1,965 million in the financial period ended 30th December 2020.
The asset base in the re-insurance company recorded a 6% growth from Kes 50.36 billion in 2019 to Kes 53.24 billion in 2020. Shareholders funds increased from Kes 31.95 billion in 2019 to Kes 34.40 billion in 2020, a growth of 8%.
Kenya Reinsurance Outlook
Kenya Reinsurance has expressed Optimism in the company’s performance in 2021 as they have put in place measures and strategies to cushion them against the effects of the prevailing pandemic.
The Board of Directors recommend payment of Kes 0.20 dividend per share.