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A.M. Best Revises Outlooks to Negative for Kenya Reinsurance Corporation Limited

A.M. Best has revised the outlooks to negative from stableand affirmed the Financial Strength Rating of B+ (Good) and the Long-TermIssuer Credit Rating of "bbb-" of Kenya Reinsurance Corp. Ltd. (Kenya Re) (Kenya).

The revised outlooks for Kenya Re's Credit Ratings(ratings) reflect a downward trend in risk-adjusted capitalisation over recentyears, a need to accelerate the development of the enterprise risk management(ERM) framework and culture, pressures on investment income, and emergingchallenges around funding the company's expansion in its regional markets,should those areas continue to deliver high growth.

Kenya Re's operating results during the first nine months of2016 were ahead of those achieved during the same period of 2015, although A.M.Best notes that quarterly results can be volatile. A.M. Best expects that thecompany will continue to produce good profits over the medium term, supportedby mandatory cessions in Kenya’s market, whilst investment returns, which havebeen exceptionally high in recent years, may come under downward pressure.