Africa-Press – Kenya. Shareholders of Kenya Reinsurance (Kenya Re) are set to receive a total payout of Sh840 million in dividends for the financial year ended December 31, 2025, underscoring the firm’s resilience in the face of declining profitability.
The Nairobi Securities Exchange (NSE) listed firm has proposed a dividend of Sh0.15 per share, maintaining returns to investors even as its bottom line came under strain during the year under review.
Net profit fell by 11.6 per cent to Sh3.9 billion, down from Sh4.4 billion recorded in 2024, reflecting a challenging operating environment both locally and in its regional markets.
The decline was largely attributed to underperformance in the company’s international treaty business, as well as weaker contributions from key African markets, including Zambia and Côte d’Ivoire.
The reinsurer cited a mix of structural and market-driven headwinds behind the slowdown.
Increased competition in the reinsurance space, tightening domestication laws in various jurisdictions, and a sharp rise in the cost of retrocession placements—driven by hardened global reinsurance rates—collectively weighed on earnings.
The firm’s suppressed credit rating also compounded these challenges, limiting its competitive positioning in some markets.
Despite the earnings dip, Kenya Re posted strong growth in investment income, which rose by 41 per cent to Sh6.6 billion.
This performance provided a crucial buffer against underwriting pressures, highlighting the firm’s diversified income streams.
However, a significant drop in interest rates tempered the gains, with average yields declining from 16 per cent in 2024 to about nine per cent in 2025, ultimately softening the overall impact on profitability.
The results come against the backdrop of governance challenges that marked much of the second half of 2025, yet the company still managed to preserve shareholder value and sustain a dividend payout—an indication of underlying financial stability.
Operationally, the reinsurer faced a contraction in its core insurance business. Total insurance revenue declined by nine per cent to Sh17.1 billion from Sh18.9 billion in the previous year.
At the same time, service expenses rose by six per cent to Sh11.1 billion, further squeezing margins.
Most notably, insurance service results plummeted by 96 per cent to just Sh0.11 billion, down from Sh2.95 billion a year earlier, pointing to significant pressure on underwriting performance.
Operating expenses also surged by 31 per cent to Sh1.8 billion, reflecting rising administrative and business costs.
Even so, Kenya Re’s balance sheet remained robust. Total assets grew by eight per cent to Sh72.2 billion, while shareholders’ funds increased by nearly 10 per cent to Sh54.5 billion, signaling sustained capital strength despite the turbulent year.
The performance paints a picture of a company navigating a complex global and regional reinsurance landscape, marked by shifting regulatory regimes, rising costs, and volatile financial markets.
