Cytonn names KENYA RE The best insurance in kenya

 

Cytonn Investment Company has launched their FY¡2016 Insurance Sector Report this morning listing the most attractive insurance company as Kenya RE from a financial health and intrinsic value perspective.

The franchise score card measured the broad and comprehensive business strength of the company and the intrinsic score measures the total return potential. Sanlam Kenya ranked lowest, ranking lowest in both franchise and intrinsic value score.

The investment firm listed Kenya reassurance limited as the most attractive insurance company with jubilee, Britam,Cfc and Sanlam taking second,third,fourth and fifth place respectively. The report was launched to offer Kenyan and global investors a glimpse into the most stable insurance company in Kenya from a franchise value and also from a future growth opportunity perspective.

The analysis used metrics to measure profitability, efficiency, diversification, risk appetite and solvency. The ranking was based on a weighted average ranking of Franchise value* (40%) and Intrinsic value (60%).

For insurance companies which are part of a group structure, the financials of the group were utilized to take into consideration the listed counter which an investor will purchase.All the listed insurance companies were composite insurance companies, offering both life and general business. Kenya Re Insurance was the only listed reinsurer.

The minimum paid-up capital has been set at Kshs. 150 mn, Kshs 300 mn and Kshs 800 mn for the life, general and reinsurance business.Kenya ranks at par with global players in most metrics, despite low penetration. However, in terms of combined ratio Kenya is worse off, showing the poor profitability of the core insurance business in Kenya.

Liberty Holdings and Britam Holdings held the first and second positions with total potential returns of 21.3% and 20.8%, respectively Sanlam Kenya registered the lowest total potential return of 14.9%.Kenya's insurance penetration stands at 3.0% compared to Africa#39 insurance penetration rate average of 3.5%.

Kenya Re maintained the top position ranking top in the composite score category supported by a strong franchise value score meanwhile Sanlam Kenya came in at position six in the composite ranking.Kenya Re is expected to grow at a CAGR of 9.4% for the next 5 years with Britam, Jubilee,CIC,Liberty and sanlam to grow at 13.8,10.7,2.7,8.9 and 36.4 percent respectively.Kenya Re is undervalued with total potential return of 17.8% with Britam, Jubilee,CIC,Liberty and sallam at 21.2,7.3,17.5,21.3and 14.9 respectively.

In Kenya there is a total of 51 insurance companies, 3 reinsurance companies and 144 insurancebrokers. There are 6,428 insurance agents and insurance companies are regulated by The InsuranceRegulatory Authority (IRA).They supervise and develop the insurance industry in Kenya.Cytonn Investments is an alternative investment manager with a presence in East Africa, Finland and the

US.They provide investors with opportunities to invest in the high growth of the East African region.They also service retail investors through Cytonn Co-operative.

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