Key Takeaways
- • AM Best affirmed the Financial Strength Rating of B (Fair) and Long-Term Issuer Credit Rating of "bb+" (Fair) for Kenya Reinsurance Corporation Limited (Kenya Re), with a stable outlook.
- • AM Best assesses Kenya Re's balance sheet strength as very strong, with Best's Capital Adequacy Ratio (BCAR) at its strongest level at year-end 2025.
- • Kenya Re's 2025 results deteriorated, with a net/net combined ratio of 110.6% as calculated by AM Best, partly due to receivable impairments.
- • Concentration risk is significant: 90% of Kenya Re's invested assets are located in Kenya, and illiquid investments such as private equity and real estate account for roughly one-third of the portfolio.
- • AM Best flagged weak enterprise risk management and governance deficiencies, citing several suspensions or dismissals of senior executives over the past decade.
Summary
AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of "bb+" (Fair) of Kenya Reinsurance Corporation Limited (Kenya Re), according to a press release distributed via Business Wire. The outlook on both ratings is stable.
AM Best's rating rationale rests on a mixed profile. The agency assesses Kenya Re's balance sheet strength as very strong, underpinned by risk-adjusted capitalisation measured by Best's Capital Adequacy Ratio (BCAR), which was at the strongest level at year-end 2025. However, the assessment also weighs a key driver of capital consumption: exposure to illiquid investments such as private equity and real estate, which together account for approximately one-third of the investment portfolio. Concentration in Kenya is another factor, with 90% of invested assets located in the country, alongside elevated economic, political and financial system risks in its core markets.
Operating performance is rated adequate. AM Best notes that return-on-equity ratios have moderately exceeded Kenyan inflation over the past five years, and that the non-life underwriting portfolio has generated technical profits in most years since corrective actions began in 2020. Results in 2025 deteriorated, however, partly due to receivable impairments, with a net/net combined ratio of 110.6% as calculated by AM Best. Earnings continue to be driven by solid investment income, reflecting a favourable, though declining, interest rate environment in Kenya.
Kenya Re is a composite reinsurer with a relatively well-diversified line-of-business portfolio across Africa, Asia and the Middle East. It benefits from privileged market access in Kenya, including compulsory cessions from domestic insurers.
AM Best rates the company's business profile as neutral but its enterprise risk management as weak. The risk management framework is described as evolving and not yet commensurate with the company's risk profile. The agency also notes governance deficiencies, illustrated by several instances of suspension or dismissal of senior executives over the past decade.
AM Best's rating rationale rests on a mixed profile. The agency assesses Kenya Re's balance sheet strength as very strong, underpinned by risk-adjusted capitalisation measured by Best's Capital Adequacy Ratio (BCAR), which was at the strongest level at year-end 2025. However, the assessment also weighs a key driver of capital consumption: exposure to illiquid investments such as private equity and real estate, which together account for approximately one-third of the investment portfolio. Concentration in Kenya is another factor, with 90% of invested assets located in the country, alongside elevated economic, political and financial system risks in its core markets.
Operating performance is rated adequate. AM Best notes that return-on-equity ratios have moderately exceeded Kenyan inflation over the past five years, and that the non-life underwriting portfolio has generated technical profits in most years since corrective actions began in 2020. Results in 2025 deteriorated, however, partly due to receivable impairments, with a net/net combined ratio of 110.6% as calculated by AM Best. Earnings continue to be driven by solid investment income, reflecting a favourable, though declining, interest rate environment in Kenya.
Kenya Re is a composite reinsurer with a relatively well-diversified line-of-business portfolio across Africa, Asia and the Middle East. It benefits from privileged market access in Kenya, including compulsory cessions from domestic insurers.
AM Best rates the company's business profile as neutral but its enterprise risk management as weak. The risk management framework is described as evolving and not yet commensurate with the company's risk profile. The agency also notes governance deficiencies, illustrated by several instances of suspension or dismissal of senior executives over the past decade.
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