VENTURES AFRICA – Nigeria Reinsurance Company, Continental Reinsurance, have been granted license to operate in Kenya – thereby joining other reinsurance companies in the East African country to expand its business in Africa.
Although Continental Reinsurance has been doing business in Kenya since 2008, it says the growing demand for reinsurance product has informed the upgrade to a fully-fledged regional office.
With presence in over 43 African countries, the Pan- African reinsurance company is established in Kenya as a subsidiary with Sh500 million investment capitalisation from shareholders. It plans to increase the paid up capital to Sh800 million within the next year.
The presence of Continent Reinsurance will intensify competition for other reinsurers in the Kenyan market. The company will compete with Kenya Reinsurance (the industry key player), African Reinsurance, East Africa Reinsurance, ZEP-Re (PTA Reinsurance) and the recent entrant, Ghana Reinsurance.
As part of its growth plan, the company plans to revalidate its presence by strengthening its structures in regional operations, increasing diversification of income by country and business lines, and strengthening their internal technical capabilities.
“We are expanding because we believe that reinsurance conducted at a Pan-African scale is in the best position to offer clients stability, longevity, innovations and more tailored service that is more responsive to market conditions,” the company’s country Managing Director George Nandy stated.
“We have put together a five-year strategic growth plan which runs from 2011-2015, under which we seek to aggressively grow our top line and improve return on equity to shareholders,” he added.
Also speaking on the new investment; Continental Reinsurance Managing Director, Femi Oyetunji, said that, “The Kenya market is very important and has shown very good prospects. We have seen growth so far and decided instead of being a branch we capitalise and form a core company in Nairobi as we expect the market will continue to grow.”
“We believe that Africa is central to our business and that Africa must develop Africa. Our vision is to be able to provide support for the African market so that premiums generated in Africa, will remain in Africa,” he emphasised.
In a related development, Kenya Reinsurance’s Managing Director, Jadiah Mwarani, also asserted that “The demands of the market place in terms of products and services are changing by the day… providers have to be innovative to meet the evolving and increasingly more sophisticated insurance customer needs.”
However, despite reports that the risk of reinsurance business in Kenya is high as a result of politics and terrorism related issue; Oyetunji said his company will be in the Kenyan market for the long haul.
Nandy also said “Despite the continuing economic crisis and threats of contagion from Europe, the Kenyan insurance market has blossomed, growing at a rate of nearly 15 percent per annum over the past seven years.”
Meanwhile, the company is looking forward to extending its business presence in other parts of the continent like South Sudan, Tanzania and Uganda, before moving to other countries in the region.
Established in 1985, Continental Re provides support to over 200 insurance companies in Africa. It has operations in 43African countries with main office in Nigeria, Kenya and Cameroon and Cote d’Ivoire – with the future plan of opening another one in Tunisia.
The company is also listed on the Nigeria Stock Exchange (NSE).