A.M. Best Revises Outlooks to Negative for Kenya Reinsurance Corporation Limited

LONDON--()--A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Kenya Reinsurance Corporation Limited (Kenya Re) (Kenya).

The revised outlooks for Kenya Re’s Credit Ratings (ratings) reflect a downward trend in risk-adjusted capitalisation over recent years, a need to accelerate the development of the enterprise risk management (ERM) framework and culture, pressures on investment income, and emerging challenges around funding the company’s expansion in its regional markets, should those areas continue to deliver high growth.

Kenya Re’s operating results during the first nine months of 2016 were ahead of those achieved during the same period of 2015, although A.M. Best notes that quarterly results can be volatile. A.M. Best expects that the company will continue to produce good profits over the medium term, supported by mandatory cessions in Kenya’s market, whilst investment returns, which have been exceptionally high in recent years, may come under downward pressure.

In A.M. Best’s view, the development of Kenya Re’s ERM framework will need to accelerate in order to match the growing scale and complexity of the company’s risk environment, and to be more aligned with best practice.

Kenya and other surrounding territories have a high risk profile due to volatile economic prospects, weak currencies and low levels of financial stability. This factor increases expected volatility of the company’s operating earnings.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

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

Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Anthony Silverman
Senior Financial Analyst
+44 20 7397 0264

anthony.silverman@ambest.com
or
Tim Prince
Associate Director, Analytics
+44 20 7397 6320

timothy.prince@ambest.com
or
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com
or
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644

james.peavy@ambest.com

Contacts

A.M. Best
Anthony Silverman
Senior Financial Analyst
+44 20 7397 0264

anthony.silverman@ambest.com
or
Tim Prince
Associate Director, Analytics
+44 20 7397 6320

timothy.prince@ambest.com
or
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com
or
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644

james.peavy@ambest.com