Increased provisioning for doubtful debts from clients in Asia, Francophone countries in Africa and the Middle East by over five times (485 per cent) saw Kenya Re post a 7.5 per cent net profit drop last year.
The reinsurer, offering covers to more than 160 insurance companies spread out in over 45 countries, closed the year ended December with provisions of Sh665 million compared to the previous year’s Sh113.6 million.
Chief executive officer Jadiah Mwarania on Friday said a big chunk of these doubtful debts are attributable to uncollected premiums from clients its serves through its Zambia and Ivory Coast offices which serve as regional premium collection centres.
As a consequence of the higher provisioning for premium obligations that have been due for more than two years, the reinsurer saw its full year net profit drop 7.5 per cent to Sh3.3 billion.
The firm’s net earned premiums during the period under review grew six per cent to Sh12.7 billion as the business reaped from the introduction of new products by insurance firms.