Kenya Re will set up a liaison office in India, marking a return to the Asian country where it exited the crop insurance business after suffering major losses three years ago.
The firm, which is majority owned by the Government of Kenya, is seeking a legal consultant to help it set up a physical branch in Gift City that will act as a base to expand operations in the wider Asian market.
Deepening presence in Asia marks a change in plan given that the firm exited the crop underwriting business in India in 2023 after it suffered a substantial but undisclosed loss.
“The branch will serve as a strategic base to expand operations in India and the wider Asian market, ensuring compliance with local regulations and optimising business opportunities,” Kenya Re says in a tender document inviting consultants to bid for the legal work.
“Kenya Re intends to engage a qualified legal/consultant firm with extensive experience in the insurance and reinsurance sector, particularly in setting up branches and subsidiaries within Gift City under the regulatory framework of the International Financial Services Centres Authority (IFSCA).”
This (office in Gift City) marks a U-turn given that Kenya Re had in 2023 declared plans to exit the Indian market amid a spike in losses.
India is Kenya Re’s second largest market after Kenya.
“The corporation’s strategic initiatives include the non-renewal of its highly unprofitable crop business originating from the Indian subcontinent, an increased focus on underwriting discipline and a strengthening of credit control procedures,” the firm said in its 2022 annual report.
The new office will be key in helping Kenya Re to grow its profits amid declining fortunes in the insurance business.
Kenya Re made a net profit of Sh4.97 billion in the year to December 2023, which represented a rise of 42 percent from Sh3.51 billion made a year earlier.
But despite the growth in net profit, Kenya Re posted a fall in revenue from the insurance business that year, as sales dipped to Sh19.57 billion from Sh23.13 billion the previous year.
The Gift City office will be Kenya Re’s first such branch in Asia and the fourth outside Kenya. The other offices are in neighbouring Uganda, Lusaka in Zambia and Abidjan, Côte d'Ivoire.
The office in Abidjan is in-charge of Kenya Re’s operations in West and Central Africa while the one in Zambia serves the Southern African region.
The expansion into the Asian market comes at a time when the company reported a fall in revenues from the insurance business in the financial year that ended in December 2023.
Kenya Re underwrites more than 200 general and life insurance companies and has presence in more than 83 countries spanning Africa, Asia and Middle East.
