AM Best has affirmed the financial strength rating of B (Fair) and the long-term issuer credit rating of “bb+” (Fair) for East Africa Reinsurance Company Limited (EARe), based in Kenya. The outlook for both ratings remains stable, according to the agency.
At the end of 2024, EARe’s balance sheet strength was reported at the strongest level, and the company is expected to maintain capital buffers above the strongest threshold. This is attributed to low underwriting leverage and continued efforts to reduce risk in its investment portfolio.
The company’s exposure to high political, economic, and financial system risks in Kenya is noted as an offsetting factor. Over 80% of EARe’s invested assets are located in Kenya, where these risks are considered significant.
However, the reinsurer is taking steps to mitigate this exposure, including shifting investments abroad into developed market bonds with higher credit quality.
EARe’s operating performance is described as adequate, with return-on-equity ratios in the past five years moderately outpacing inflation rates in Kenya. The company reported a net/net combined ratio of 96.2% for 2024, marking the third consecutive year of combined ratios below 100%. AM Best points to prudent underwriting as a driver of this trend.
Investment income is projected to remain the main contributor to EARe’s earnings, reflecting the interest rates available from domestic issuers in Kenya. The company’s business profile is characterized as limited, with insurance service revenue of US$50 million in 2024. EARe maintains a geographically diverse portfolio across Africa, but most premium volumes are sourced from East African markets.
The African reinsurance sector has seen increased activity this year. Africa Re, a major pan-African reinsurer, opened a new office in Kinshasa, Democratic Republic of Congo, earlier this month as part of its strategy to expand its presence and support the insurance and reinsurance sector in the region.
Africa Re also reported a 19.2% increase in gross written premiums for the first half of 2025 compared to the same period in 2024, with net profit for the first half reaching US$78.5 million. The company attributed these results to stronger underwriting performance and investment returns.
In addition, Africa Specialty Risks (ASR) received accreditation from the National Bank of Rwanda in August to provide reinsurance capacity and support to Rwanda’s insurance market. This approval enables ASR and its Lloyd’s Syndicate 2454 to offer AA-rated reinsurance solutions to domestic insurers.
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