Kenya Reinsurance Corporation (Kenya Re) is set to establish a physical subsidiary in Tanzania following a planned investment of approximately $15 million, in a move aimed at increasing the capacity of local insurers to underwrite large-scale risks and supporting the country’s economic development agenda.
Speaking in an interview, Kenya Re Group Managing Director Dr Hillary Wachinga said the new subsidiary would provide reinsurance capacity to Tanzanian insurance companies, enabling them to take on major risks that could otherwise exceed their financial capacity.
Kenya Re currently operates in 90 countries and has regional offices in Uganda, Côte d’Ivoire and Zambia. However, Dr Wachinga said the Tanzanian subsidiary would be driven primarily by local expertise and leadership.
He said the company’s senior management, including the Director, Chief Financial Officer and Chief Operating Officer, would be Tanzanian nationals.
“We may have only one Kenyan staff member; all others will be Tanzanians,” Dr Wachinga said, underscoring the company’s commitment to creating jobs and developing local expertise.
Kenya Re operates on a business-to-business (B2B) model, providing reinsurance services to insurance companies rather than directly to individual customers.
Dr Wachinga described the company as a “shield” or “big brother” to local insurers, providing additional financial capacity that allows them to underwrite major risks, including multi-billion-shilling construction projects and earthquake-related insurance.
He said establishing a physical presence in Tanzania would enable Kenya Re to provide these services more efficiently while supporting the growth of the domestic insurance industry.
The move is also expected to help reduce capital outflows associated with Tanzanian insurers purchasing reinsurance services from companies based overseas.
According to Dr Wachinga, keeping more reinsurance premiums within the country would help retain capital in Tanzania, support exchange-rate stability and ensure that profits generated from the insurance sector are reinvested in the domestic economy.
The planned investment comprises $1 million in regulatory capital and $14 million in working capital, reflecting Kenya Re’s commitment to establishing a substantial operation in the Tanzanian market.
Although the physical subsidiary is new, Kenya Re has been active in Tanzania for more than 50 years, Dr Wachinga said.
He added that a recent feasibility study had confirmed the viability of establishing a local subsidiary, with the company expecting the operation to break even within approximately 18 months.
Kenya Re has already obtained its certificate of incorporation and is finalising the remaining legal requirements needed to secure an operating licence.
The company expects to begin physical operations and provide on-the-ground support to clients from September 1.
Dr Wachinga praised Tanzania’s regulatory framework, describing it as “world-class” and conducive to investment.
He said the country’s policy of encouraging the domestication of reinsurance business demonstrated a forward-looking approach to strengthening economic resilience and retaining financial resources within the country.
He said Kenya Re’s expansion would also contribute to Tanzania’s National Development Vision 2050 by providing local insurers with the technical expertise and financial capacity required to support major infrastructure and other large-scale development projects.
