Kenya Re Targets Egypt with Shariah Tied Units

After converting Sh5.25 billion from cash reserves to capital, through the issuance of bonus shares, Kenya Re wants to establish a Shariah-compliant subsidiary in Egypt.

Re-takaful operates on Shariah principles and is the Islamic alternative to conventional reinsurance.

Last year’s decision to issue an additional 2.099 billion bonus shares that saw the State’s capital base quadruple from Sh1.75 billion to Sh6.99 billion this, as per the State-controlled reinsurer.

The revised Egyptian insurance law that was enforced last year is met by Kenya Re’s new capital base thus raising the minimum capital base for reinsurers from Sh391.98 million (E£60 million) to Sh6.49 billion (E£1bn).

Jadiah Mwarania, the managing director said in an interview, “Increasing our capital base was necessary for accessing some markets. We are thinking of Egypt for re-takaful business given the high Muslim population. That could be our next stop next year,”

He said the firm has a presence in Uganda, Ivory Coast, and Zambia, but will be giving priority to Egypt despite having done feasibility studies for Sudan and Nigeria.

The sector is being moved away from relying on conventional reinsurance lines by the widening market for Shariah-compliant insurance products in Africa.

Aided by the move, there will be an increase in re-takaful premiums for the firm beyond the Sh1 billion registered last year this as per Mr. Mwarania

This was mainly earned from Kenya, Sudan and Middle East markets such as Saudi Arabia.

Mr. Mwarania said, “The potential is huge given the growing Muslim population and financial inclusion is also rising. Products such as ‘sukuk’ bonds will mean more reinsurance,”