Kenya Re, one of Kenya’s leading reinsurance companies, is planning to exit the Indian market due to increased losses primarily from the agricultural sector. The Indian market accounts for about 32% of Kenya Re’s gross premiums, making it the second-largest source of premiums after Kenya.
Bad weather conditions, including tropical cyclones and flooding, have led to losses in India’s agricultural sector, impacting underwriters and prompting Kenya Re’s strategic withdrawal.
This move will significantly affect Kenya Re’s geographic diversification, shifting its reliance back to the Kenyan market, which contributes 38% of the firm’s premiums. Additionally, the company has been seeking to expand its business in other African countries as part of its diversification strategy.
Despite the challenges in India, Kenya Re reported a net profit of Sh904.1 million in the half-year ended June, marking an 8.6% growth compared to the previous year. The company’s performance was driven by cost reduction measures, including lower operating expenses and claims paid to insured parties.
Opinion: Kenya Re’s decision to exit the Indian market reflects the challenges faced by insurance companies operating in diverse markets with varying risk profiles. The impact of weather-related losses on underwriters highlights the importance of risk assessment and diversification strategies. As Kenya Re focuses on strengthening its position in its home market and expanding its presence in other African countries, it should prioritize robust risk management practices to ensure sustainability.
This article was published by (marketnewsng).