A.M. Best Affirms Ratings of Kenya Reinsurance Corporation Limited

LONDON--()--A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of Kenya Reinsurance Corporation Limited (Kenya Re) (Kenya). The outlook for both ratings is stable.

The ratings reflect Kenya Re’s adequate risk-adjusted capitalisation, stable operating performance and strong competitive position within its local market. Partially offsetting rating factors include the ongoing challenges related to the current conditions in the reinsurance market, the company’s weak enterprise risk management (ERM) culture and its exposure to Kenya’s volatile business environment.

During the first half of 2015, Kenya Re maintained good levels of risk-adjusted capitalisation whilst increasing its gross written premiums. During this period, Kenya Re increased its shareholding interest in ZEP-RE (PTA Reinsurance Company), reaching a 16% stake in its local competitor. Although this investment increases the capital requirements to support investments in affiliates, Kenya Re’s risk-adjusted capitalisation remains at an adequate level. During the first six months of the year, Kenya Re’s operating performance was stable, and the loss ratio during the period was broadly unchanged when compared with the same period in 2014. Going forward, A.M. Best expects the company to continue to grow its business whilst maintaining adequate risk-adjusted capitalisation and stable underwriting performance.

On the other hand, market conditions remain uncertain, and Kenya Re remains exposed to Kenya’s volatile business environment. Moreover, the company’s ERM culture is relatively weak for its current risk profile. A.M. Best considers that as Kenya Re continues growing its franchise and increasing the complexity of its risk exposures, this weakness could turn into a potential source of instability.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Pablo Vasquez, +(44) 20 7397 0311
Financial Analyst
pablo.vasquez@ambest.com
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Tim Prince, +(44) 20 7397 0320
Associate Director, Analytics
timothy.prince@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Pablo Vasquez, +(44) 20 7397 0311
Financial Analyst
pablo.vasquez@ambest.com
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Tim Prince, +(44) 20 7397 0320
Associate Director, Analytics
timothy.prince@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com