AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” (Fair) of Kenya Reinsurance Corporation Limited (Kenya Re) (Kenya). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Kenya Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and weak enterprise risk management.

Kenya Re’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio. A key driver of capital consumption is Kenya Re’s exposure to illiquid investments, such as private equity and real estate, which together account for approximately one-third of its investment portfolio. The balance sheet strength assessment also considers Kenya Re’s exposure to very high levels of economic, political and financial system risks, which are associated with its core markets.

AM Best views Kenya Re’s operating performance as adequate, considering its return-on-equity ratio has moderately exceeded inflation levels in Kenya over the last five years. Since initiating corrective actions in 2020, the company's non-life portfolio has reported technical profits in most years. The company reported an improvement in net/net combined ratio to 78.1% for 2024, as compared with 97.7% for 2023, as calculated by AM Best on an IFRS 17 basis. Overall earnings remain driven by favourable investment income, underpinned by high interest rates that are prevalent in Kenya.

Kenya Re is a composite reinsurer operating a relatively well-diversified portfolio by line of business across Africa, Asia and Middle East. The company has privileged market access in Kenya, where it benefits from compulsory cession from domestic insurers.

Kenya Re’s risk management framework is evolving, and its risk management capabilities are weak when compared with its risk profile. AM Best notes that the company’s managing director was placed under suspension in September 2025, due to an ongoing internal matter. AM Best will continue to monitor the outcome of this matter.

These rating actions changed following notification of the committee’s decision to Kenya Re.

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