Kenya Reinsurance Corporation (Kenya Re) plans to expand into the asset management business in a bid to diversify its revenues and reduce reliance on its core reinsurance operations amid stiff competition from regional players.
Asset management involves investing money on behalf of clients, including corporates, institutions and individuals, to help grow their wealth while mitigating risk. Asset managers charge service fees.
The firm is already recruiting consultants to conduct a feasibility study on the planned entry into the asset management business, signalling its intention to formalise the expansion into fee-based investment services.
The reinsurer, long known for underwriting risk, now wants to enter an arena dominated by banks, fund managers and insurance-backed investment arms. It hopes that securing a seat at the table of money managers will turn its pools of capital into a stream of fees.
The feasibility study is expected to assess market opportunities, regulatory requirements, capital needs and potential business models for the new venture. Kenya Re is open to options such as setting up the business from scratch as an asset management subsidiary or acquiring an existing fund manager.
‘The corporation is seeking to engage a consultant to undertake a comprehensive feasibility study and advisory services for the establishment of an asset management subsidiary,’ the reinsurer said in a disclosure.
‘This initiative is part of the corporation’s strategic objective to diversify revenue streams, enhance shareholder value and expand into the financial services sector, specifically in fund and wealth management,’ it added.
Kenya Re is entering a space that already has several major insurance groups offering asset management services through subsidiaries, which focus on pension schemes, unit trusts and high-net-worth portfolios. Major banks also offer asset management services through subsidiaries or wealth management desks.
Market entry
The consultant will be required to determine the commercial, financial and strategic viability of establishing an asset management subsidiary and advise on the optimal market entry strategy.
In addition, the consultant will identify and profile potential acquisition targets and provide transaction advisory services, including valuation and acquisition support, should Kenya Re opt for a buyout instead of a greenfield setup.
The feasibility study will also explore competitive dynamics in the asset management industry, which is currently dominated by banks, fund managers and a growing number of independent investment firms.
If implemented, the shift would see Kenya Re move beyond its traditional role of underwriting risk for insurers to actively managing funds, potentially leveraging its large investment portfolio and balance sheet strength to generate additional income streams.
The move could also position Kenya Re to better utilise its investment expertise, as reinsurers typically hold significant financial assets to back their underwriting obligations.
Earnings pressure
Kenya Re’s push into asset management reflects a broader trend among insurance and reinsurance firms globally, which are increasingly turning to investment-related services to stabilise earnings.
Asset management services allow insurers and reinsurers to earn recurring fees while also deepening relationships with institutional clients such as pension funds and corporates.
Kenya Re has maintained a Sh839.94 million dividend despite net profit retreating by 11.6 percent to Sh3.92 billion in the financial year ended December 2025.
The reinsurer attributed the drop in profitability to underperformance in the company’s international treaty business and its operations in Zambia and Côte d’Ivoire.
Kenya Re, which is 60 percent owned by the Kenyan government, serves over 80 markets through its head office in Kenya, as well as three subsidiaries in Côte d’Ivoire, Zambia and Uganda. It said last year it was planning to set up a subsidiary in Tanzania and an office in India.