The government has proposed to increase to 25% the proportion of business that insurers are required to place with the Kenya Reinsurance Corporation (Kenya Re), up from the current 20%, under new draft regulations.
The CEO of the Insurance Regulatory Authority, Mr Godfrey Kiptum, in a notice, said, “The proposed amendments are intended to take effect on 1 January 2026 to apply to all treaty reinsurance contracts entered for the year 2026 and for subsequent years, until the Corporation is privatised.”
The National Treasury proposes the change under the draft Insurance (Amendment) Regulations, 2025, stating that the measure is intended to strengthen domestic reinsurance capacity and deepen market development. The draft amendment seeks to make this mandatory cession a permanent feature rather than a measure that must be renewed annually, as is currently the case. The increase will apply to both general and long-term insurance classes.
At a forum held earlier this week to discuss the Insurance (Amendment) Regulations 2025, Mr Kiptum outlined details of the proposed increase in mandatory cessions on treaty reinsurance to 25%, saying that the move is designed to boost domestic capacity and mobilise national investment funds.
The Treasury also expects that the higher cession rate could improve Kenya Re’s dividend capacity over time. Kenya Re is 60% owned by the Kenyan government.
The Treasury also expects little change in premium rates, as 75% of reinsurance placement remains open to market competition.
A two-week consultation exercise on the proposed regulatory amendments ends on 15 October.