WASHINGTON, D.C., Jan. 13 -- The International Finance Corporation (IFC) has approved an investment of up to KSh 75 million (US$1.1 million equivalent) in the East Africa Reinsurance Company (EARC), the first private sector reinsurance company in Kenya. EARC is being established by First Chartered Securities Limited, which is taking an equity stake of 30 percent, and Jubilee Insurance of Kenya, with an equity stake of 20 percent. IFC's investment represents 15 percent of EARC's ordinary share capital. Among the other shareholders are Kenindia Assurance Company and Pan Africa Insurance Company, two of the top ten insurance companies in Kenya. EARC, a limited liability company, will transact reinsurance business on a treaty and facultative basis so as to retain a bigger volume of reinsurance premiums in Kenya. Once it is firmly established, the company plans to offer technical and advisory services to its ceding companies and to expand into other markets in East Africa. According to IFC officials, IFC is encour
aging initiatives taken by the Kenyan Government to liberalize the country's reinsurance industry, now dominated by state-owned companies. Inadequate capacity of the local reinsurance industry in recent years has forced Kenyan insurers to seek costly offshore treaty facilities, with premiums usually set at international rates and paid for in scarce foreign currencies. IFC, a member of the World Bank Group, is the largest multilateral source of financing for private sector projects in developing countries. (30)
