Kenya Reinsurance Corporation (Kenya Re) wants to map its exposure to floods and earthquakes across East Africa as extreme weather risks become an increasing concern for insurers and reinsurers.
The State-owned reinsurer has invited bids for a modelling firm to map out the catastrophe risks in East Africa, with a key focus on Kenya, according to its request for proposals.
A clearer estimate of potential flood and earthquake losses could give the reinsurer a stronger basis for assessing the risks it assumes from insurers, potentially informing the pricing and structure of its reinsurance covers.
Kenya Re’s move comes against the backdrop of a 2024 advisory by the Insurance Regulatory Authority (IRA) urging insurers to review their risk models to capture a changing risk landscape, including climate change-related risks and cybersecurity threats.
The exercise will estimate potential catastrophe losses over different return periods and determine its probable maximum loss (PML) and tail value at risk (TVAR) for individual events and on an aggregate basis.
‘The scope of catastrophe modelling is to estimate Kenya Re’s probable maximum exposure to catastrophic events for each return period and provide a report on the same,’ reads the tender document.
PML is the largest realistic loss an asset or portfolio could suffer from a single catastrophic event while TVAR is the average size of losses when the situation goes beyond the normal worst-case warning line.
Kenya Re expects the consultant to also develop catastrophe maps and exposure reports and model different earthquake scenarios, including low, medium and high-magnitude events.
The firm currently provides reinsurance services to more than 482 companies spread out in over 84 countries in Africa, Middle East and Asia.
The report will also be designed to meet the requirements of global credit rating agencies such as AM Best and Fitch and remain valid for at least three years.
Kenya Re’s move comes as East Africa faces increasingly variable climate conditions, with floods and droughts creating risks for agriculture, infrastructure, businesses and households.
The World Meteorological Organization says floods were the most commonly reported extreme-weather hazard in Africa in 2025, while drought affected more than 8.5 million people in East Africa.
Multiple forecasts now point to an over 90 percent chance of super El Niño, which will manifest in East Africa as enhanced rainfall. This could increase flood risks, including damage to infrastructure and crops.
Kenya Re modelling will provide a framework to understand how such catastrophe scenarios could translate into losses, supporting its assessment of exposures across its general reinsurance business.
The reinsurer is preparing to deepen its presence in East Africa by setting up a subsidiary in Tanzania and a liaison office in Rwanda. Besides East Africa, it is also setting up a branch office in India’s Gujarat International Finance Tec (Gift) City.
Currently the reinsurer has three wholly owned subsidiaries in Uganda, Zambia and Côte d’Ivoire, giving it a presence in East, Southern and West Africa.