Kenya Reinsurance Corporation (Kenya Re) has issued a profit warning for the full financial year ended December 2018 citing higher claims, forex losses, lower income and impairment of assets.
“The expected decrease is mainly attributable to high claims reserves in the year, forex losses due to currency devaluations in some of our markets, unexpected reduction in income from (an) associate and impairment of an asset held for sale,” said the firm in a cautionary statement.
In 2017, the insurer posted 8.8% rise in after-tax profit in the year ended December.
Earlier this year, Genghis Capital said, “Kenya RE is a potential target for a strategic investor and could be amongst the government-owned entities (partially owned in this case) that may be up for privatisation.”
“Kenya Re offers attractive valuation having historically traded below book value, which can however be justified by its low ROE and weak corporate governance as evidenced by the scandals that have ensued in the past, Said Genghis adding that “We believe that there is significant potential to be unlocked in Kenya Re, should be a complete change of guard.”