Kenyan reinsurance company plans Tanzania entry with $20 million investment

Kenya Re Managing Director, Dr Hillary Wachinga, said the company was engaging Tanzanian regulators as part of preparations to begin operations in the country.

Speaking to journalists in Dar es Salaam on Thursday, he said the company’s role would be to provide insurers with additional financial capacity to underwrite larger risks and meet claims beyond their normal capacity.

“What we give them is the capacity to do business and enable them to take on more business than they are currently able to. So, we build their capacity beyond their normal limits,” Dr Wachinga said.

Reinsurance allows insurance companies to transfer part of their risks to another insurer, enabling them to absorb large or unexpected claims while continuing to meet their obligations to policyholders.

Dr Wachinga said Kenya Re had conducted research on Tanzania’s insurance market and identified significant opportunities, adding that the country’s regulatory framework was conducive to investment.

“That is why we are coming to establish the company here,” he said.

He said the company’s presence in multiple markets was also part of its risk diversification strategy.

“We operate in 90 countries. The reason for spreading across all these countries is risk management. If you have business in the Middle East, Asia and Latin America, it is difficult for all of them to collapse at the same time,” he said.

Dr Wachinga said Kenya Re was East Africa’s oldest reinsurance company, with 56 years of experience in the industry, and had since expanded its operations beyond the region.

He said the company planned to invest more than $20 million in Tanzania, including $6 million for regulatory purposes.

He added that the company intended to retain the funds in Tanzania, arguing that its investment would contribute to economic growth.

“We have already registered our company. What we are doing now is following up on our licence. We expect to launch operations in September this year. This means that these insurance companies will no longer have to travel to Nairobi to access these services,” he said.

Expert welcomes move

Insurance expert Justin Kibona welcomed Kenya Re’s planned entry, describing it as a long-overdue development for Tanzania’s insurance industry.

He said established insurance markets had several reinsurance companies, enabling smaller insurers to take on larger risks with greater confidence.

“The arrival of this company is a relief for insurance companies because they will now have greater confidence to underwrite large risks for their customers without worrying. This is a positive development that demonstrates the growth of the insurance sector,” Mr Kibona said.