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ZEP-RE Profit Soars Despite Global Economic Challenges

 

    • Net Profit grows to Ksh1.9 billion (USD 19.9 million), as total income at Ksh12.9 billion (USD129 million)

    • Increase of 10 percent in gross written premiums in financial year 2015 to Ksh13.8 billion (USD138.7 million) over 2014.

    • Proposed dividend of Ksh450 million (USD4.5 million) to be paid.

    • Gross losses amounted to Ksh2.3 billion (USD23 million) while net retained losses stood at Ksh400 million (USD4 million) resulting from the impact of the Nepalese earthquake.

Mombasa: 27 May, 2016 – ZEP-RE (PTA Reinsurance Company) grew significantly in the financial year ending December 31, 2015, recording Ksh1.99 billion (USD19.9 Million) in net profit despite the harsh economic environment.

 ZEPRE AGM270516 Pic1s

 

 

Speaking at the Company’s 25th Annual General Meeting held in Mombasa, ZEP-RE’s Board Chairman Mr. William Erio said: “The year 2015 started with great promise but intervening negative pressures namely a slowdown in China (a key trading partner of the COMESA region), a fall in global commodity prices, uncertainty in the Eurozone (due to the Greek debt crisis) and a strengthening dollar turned the economic environment on its head. The global economic situation negatively impacted economies of the region resulting in slowdowns, reduced consumption and a weakening of local currencies against the dollar.”

 

In addition to the economic slowdown, the Company had to deal with the effects of  two major earthquakes in Nepal, one of its major markets, which resulted in gross losses which amounted to Ksh2.3 billion (USD23 million) while net retained losses stood at Ksh400 million (USD 4 million).

 

“The fact that ZEP-RE withstood such a catastrophe is testament to the Company’s strong financial position and a versatile risk management system that includes an effective reinsurance programme,” the chairman added.

 

Commenting on the company’s performance, the Secretary General of the Common Market for Eastern and Southern Africa  (COMESA), Mr. Sindiso Ngwenya said the company had remained true to its developmental role as outlined in its founding objectives.

 

“I am happy to note that ZEP-RE’s performance is attracting investors from within and outside the African continent. This can only bode well for the company and its growth goals,” Mr Ngwenya said.

 

 

Good performance

Gross written premiums rose by 10.6 percent to Ksh13.8 billion (USD 138.7 million) in 2015, built on the continued and systematic implementation of the company’s strategy of taking service closer to its customers.

 

The total income (net earned premium, investment income, commission earned and other income) for the year 2015 reached the highest level in the company's history. Total assets grew by 21.4% to Ksh31.4 billion (USD310 million) and total equity rose by 18.1% to Ksh16.9 billion (USD169 million) over the 2014 results.

 

“We have recorded growth in our key markets of Kenya, Uganda, Sudan and India supported mainly by growth in infrastructure development in those markets,” ZEP-RE Managing Director Mr. Rajni Varia.

 

Tied to this demand for support of infrastructure development by ZEP-RE’s member countries, is the company’s growing international reputation in underwriting property, casualty, life, marine and motor businesses.

 

The company currently writes over 4000 treaties from 500 companies in 50 countries drawn from Africa, Middle East, and the Indian Sub-continent.  In Eastern and Southern Africa, the company enjoys a greater goodwill as demonstrated by the 10% mandatory cessions being offered by governments of Kenya, Tanzania, Zambia and Uganda.

 

“Our business in the region is not limited to the 10% mandatory cessions as shown by increased additional gross premium we underwrote in Uganda and other markets in 2015,” said Mr. Varia.

 

The company expects to maintain strong growth in 2016 despite fall in oil & commodity prices and terrorism threats. This growth is expected to be driven mainly by a combination of factors including infrastructure investment and the expanding service sector in most member countries.

 

“The renewed business confidence globally coupled with a resilient and steady regional economy should help us consolidate and increase business currently underwritten in our core markets. This should put the ZEP-RE in good stead to achieve its business goals and objectives for the year,” Mr. Varia said.

Key Financial Trends: 2009 – 2015

2009

2010

2011

2012

2013

2014

2015

Gross Premium Written

55,748,911

            59,843,116

63,536,571

81,714,820

100,181,402

125,437,018

138,755,947

Net Written Premiums

  44,266,616

            46,042,768

49,846,359

66,307,584

83,964,961

105,888,455

116,235,351

Net Earned Premiums

  40,214,408

            44,361,208

46,489,807

60,683,391

77,695,433

96,367,104

110,275,997

Investment & other Income

    8,253,469

            10,117,026

11,083,593

15,255,819

14,921,584

17,619,892

18,875,457

Total Income

  48,467,877

            54,478,234

57,573,400

75,939,210

92,617,017

113,986,996

129,151,454

Claims Incurred

  23,437,454

            27,097,758

26,103,374

30,355,413

40,667,775

51,190,046

59,786,689

Commissions & other
operating expenses

  18,602,983

            22,133,214

22,693,198

33,902,114

36,586,089

44,091,207

49,403,820

Profit for the year

    6,427,440

              5,247,262

8,776,828

11,681,683

15,363,153

18,705,743

19,960,945

Dividends Paid
& Capitalized

    1,200,000

              1,311,000

1,573,200

2,359,800

3,226,200

4,115,300

4,500,000

Total Assets

  87,128,548

103,110,370

130,337,123

154,088,372

201,843,403

255,731,818

310,496,459

Total Equity

  44,474,180

            49,987,272

66,656,019

78,774,839

105,728,865

143,586,785

169,683,104

 

********************

About ZEP-RE: 

ZEP-RE (PTA Reinsurance Company) is a regional organization charged with the task of promoting trade, development and integration within the COMESA region through trade of insurance and reinsurance business. ZEP-RE was created by an Agreement of Heads of State and Government of the COMESA region on 21st November 1990 in Mbabane, Swaziland.

 

The Company has been in operation since 1993 and is headquartered in Nairobi, Kenya. ZEP-RE also operates regional offices in Douala, Cameroon; Lusaka, Zambia; Harare, Zimbabwe, Abidjan, Cote d’Ivoire and a Retakaful Window in Khartoum, Sudan.

 

 

http://www.zep-re.com/

       

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