Kenya Re is set to open a subsidiary in Uganda, deepening its presence in the East African country.
The board sees this as part of the company’s expansion programme and shareholders will vote on this as a special resolution during the annual general meeting (AGM) set for June 14.
“That the company be and is hereby authorised to establish a subsidiary in Uganda on such terms and conditions as may be determined by the relevant regulatory authorities and the board of directors,” says the firm in its AGM notice.
Directors will also be seeking for shareholders’ nod to determine the conditions upon which the planned subsidiary will be established. If the resolution is passed, the company will seek regulatory approvals to set up the business.
This will deepen its presence in Uganda, having entered that market in 2015 by acquiring five per cent stake in the Uganda Reinsurance Company at Sh20 million. As at end of 2017, Kenya Re had raised its stake to 11.5 per cent in Uganda Re, according to its annual report.
The decision will take competition at the doorstep of Uganda Re. It is not immediately clear if Kenya Re will offload the minority stake in the reinsurer.
The Kenyan multinational, which offers covers to more than 160 insurance companies spread out in over 45 countries in Africa, Middle East and Asia, has been hinting at entering new markets in the face of rising competition.
In March last year, Kenya Re management said the decision by countries such as Uganda, Tanzania and Ethiopia to set up their own reinsurers had eaten into its market share.
“When they form these national reinsurers it means they get compulsory cessions which reduces the volume of business available for foreign reinsurers,” Managing Director Jadiah Mwarania said earlier.
Setting up in such markets and being considered a local company instead of having to offer the services from Kenya is therefore seen as a way of reacting to the competition.
Further, the company is keen on expanding line of insurance products such as re-takaful in markets where it already operates.