Kenya Reinsurance Corporation (Kenya Re) has posted a 36.4 per cent drop in after-tax profit in the year ended December 2018, which the re-insurer attributed to higher claims, forex losses, lower income and impairment of assets.
Kenya Re net profit stood at Sh2.27 billion in the period compared to Sh3.57 billion the year before.
The Nairobi Securities Exchange (NSE)-listed re-insurer’s net earned premiums during the period under review grew four per cent to Sh14.2 billion from Sh13.6 billion the previous year.
The re-insurer’s gross written premiums remained nearly flat at Sh14.83 billion from the Sh14.82 billion reported in 2017.
The firm’s earnings from investments grew by 7 per cent to hit Sh3.38 billion last year compared to Sh3.16 billion in the previous period.
Net claims incurred increased by 16 per cent from Sh7.59 billion to Sh8.83 billion.
The board of directors of the re-insurer recommended a final dividend payout of Sh0.45 per share nearly half the 0.85 per share paid to shareholders the previous year.
Chief executive officer Jadiah Mwarania said the re-insurer, which offers covers to more than 160 insurance companies spread out in over 45 countries in Africa, Middle East and Asia is eyeing new markets across the globe in the face of stiffening competition.
Mr Mwarania said that the firm is dealing with stiff completion from domesticated re-insurers in countries like Nepal, Ethiopia and Uganda as well as new entrants.
“Mergers and acquisitions have led to larger re-insurance capacities within the conglomerates which in turn reduces their reinsurance requirements. Competition has also significantly increased continuously in recent times,” said Mr Mwarania.
“There are nine reinsurance companies that have physical offices in Nairobi including ourselves.”
Mr Mwarania however said the firm plans to leverage on its five year strategy that will see it invest in foreign reinsurers in efforts to remain relevant in countries it has operations.
Kenya Re draws most of its gross premiums from the Kenyan market where it will continue to enjoy mandatory cession of 20 per cent until 2020.
The guaranteed cessions to the company are backed by the Kenyan government which owns 60 per cent of the reinsurer, with the remaining shares held by the investing public at the Nairobi bourse.
The re-insurer was in March last year in the eye of a storm after it sent home Mr Mwarania and replaced him with Michael Mbeshi, the reinsurer’s property management general manager, in an acting capacity.
Mr Mwarania went to court to protest the sacking and was re-instated by the Employment and Labour Relations Court with Kenya-Re appealing the decision.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.