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Kenya Reinsurance Company will seek an extension to the law that forces local insurers to cede at least 20 percent of the reinsurance business to the Nairobi-listed firm.
This law is set to expire on December 31.
But Kenya Re is pushing for an extension and rise of the ceded business beyond 20 percent.
The forced reinsurance business accounts for 35 percent of Kenya Re’s annual revenues, reflecting its importance to the financial health of the State-owned Kenya Re.
“We will make a proposal for the mandatory cessions to be extended and if possible, to be increased. Historically, the government has been renewing,” said managing director Jadiah Mwarania in an interview with Business Daily.
Kenyan insurers are also required to place 10 percent and five percent of their business respectively with Zep Re and Africa Re. Other reinsurers can, therefore, benefit from only 65 percent of the cessions.
Other markets outside Kenya have been implementing laws requiring higher retention of business locally.
Uganda Re gets 15 percent in compulsory policy cessions while Tanzania Re gets 20 percent treaty cessions in addition to 10 percent policy cessions.
Kenya Re lost policy cessions in 1999, remaining only with treaty sessions.
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