APRIL - June 2016

LEVITES RE-NEWS 3

EDITORIAL

LEVITES RE-NEWS

EDITOR IN CHIEFEsther Muhindi

CONTRIBUTING WRITERSOscar Kagwa

Sharon Muhindi

Jane Waweru

Ben Kajwang

Levites International ReinsuranceBrokers Ltd.

Chiromo Court, ChiromoRoad, Westlands,

P. O. Box 694 - 00517,Nairobi, Kenya

Email: info@surfcomkenya.comTel: +254 720 377925

LEVITES RE-NEWS IS PUBLISHED BY :

DESIGN AND LAYOUT BY:Surfcom Kenya

P.O Box 89-00600Nairobi, Kenya

The vote to exit the European Union by UK has caused panic in the world econo-mies. The global �nancial markets have reacted with shock with the sterling pound declining to a 31 year low. Global central banks sounded the alarm and have taken mitigations measures to protect their respective money markets.There were fears that one or two other member states may exit the bloc after Greece” exit.Symbiosis is a close and often long-term interaction between two di�erent biological species for surviv-al. This may be facultative or obligatory. Insurers and brokers enjoy obligatory symbiotic relationships and support each other to enter new markets and product development for the bene�t of their mutual clients.

NCA Reinsurance Company and Levites Reinsurance brokers o�ered a 3-day engi-neering seminar in Nairobi. Participants were drawn from the Kenyan insurance industry.We all have a moral obliga-tion to support the less privi-leged in society. A needy person is de�ned as one who lacks basic supplies, impov-erished and destitute. Com-panies and individuals support the needy in various ways including education sponsorship, donating food and supplies and mentoring. Whoever is kind to the poor lends to the Lord, and he will reward them for what they have done. We wish you our customers an enjoyable reading of our second quarter newsletter

Esther MuhindiEmail:emuhindi@levitesre.com

ENGINEERING INSURANCE TRAINING HELD IN NAIROBI

This coupled with increasing consumer awareness is push-ing up demand not only for insurance products but more importantly, the quality of services. This demand witnessed in the year 2015 is pushing insurers to funda-mentally relook at their business models in terms of inno-vation (channels and products) and reach. The Building and Construction sector registered an accelerated growth of 13.1% in 2014 compared to a revised growth of 5.8% in 2013.

This growth is attributed to an increase in funds allocated to construction of roads and railways coupled with reha-bilitation of existing road network. Commercial bank credit extended to the sector grew by 13.6% from Kshs. 70.8 billion in 2013 to Kshs. 80.4 billion in 2014.

29.49%12.73%30.58% 29.44%16.78%% Growth

2014

3,795,729

PREMIUM GROWTH IN '000'

Engineering

2010 2011 2012 2013

1,538,485 2,008,942 2,600,378 2,931,347

enya's insurance industry was reported to be the fastest growing industry in Africa (Sigma 4/2015). However, the industry is facing a number of challeng-es that must be addressed jointly with its stakeholders. Among the challenges include the threat of terrorism and sabotage and insu�cient capacity to underwrite major infrastructure projects such as the Standard Gauge Railway, Oil & Gas and LAPSET which are currently being insured outside the country. In 2014, engineer- ing insur-ance premiums grew to 3,547,973.00 which represent- ed a 27.8% growth which had a contribution of 1% to the Gross Direct Premiums Collected. As per the IRA statistics, 2015 Annual report.

The recent upward movement in economic growth is underpinned by a growing middle class, discovery of oil and gas deposits, major investments in infrastructure projects as well as shifting demographics. These factors continue to create immense opportunities for the insur-ance sector in Kenya and Africa as a whole.

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symbiotic relationship is de�ned as relationship between two complex organisms established for long term survival.The word symbiosis was coined in 1879 by Heinrich Anton de Bary a German botanist. The idea of helping someone to get some help in return is the essence of a symbiotic relationship.These relationships are essential as they provide a balance that can only be achieved by working together. Symbiotic relationships can be obligate or facultative. Obligate symbiosis exists where both symbionts entirely depend on each other for survival. Facultative symbiosis is when the species live together by choice and none is dependent on the other for survival. Lichen is made up of both algae and fungi, and together they provide each other with food and structure. This type of symbiosis is obligate since the two species are dependent on each other for survival. Pollination symbiosis is another example of an obligate symbiosis. Pollinators, such as bees and birds, receive nectar from plants while transporting pollen that the plants need for fertilization. A facultative symbiotic relationship exists where the species bene�t from each other but the symbiotic partners are not fully dependent on each other for survival. A cleaning symbiosis is a facul-tative symbiosis. In this case, one organism cleans para-sites o� another organism's body, which in turn provides a source of food. Algae eaters are a type of �sh used in aquarium tanks to help control and reduce unsightly and potentially damaging algae prorogationThese cleaner species will crawl over the bodies of larger �shes, removing and eating various parasitic critters that plague them, bits of dead skin, scales, and mucus. The cleaners will also frequently go over more than a �sh’s body. They’ll go into their gill area from behind the �aps that cover them, picking the gills clean.This is a facultative symbiotic relationship because the survival of the ornamental �shes is not entirely dependent on the algae eater cleaning. Algae can be eliminated using aqua tank chemicals

The cleaning �shes also feed on other types of food beside algae for survival. Rhinos live an average of 35-50 years. During that time, they rely on a little help from birds. These birds ride on the backs of rhinos, eating small parasites and bugs. As the bird eats, it is also keeping the rhino clean. Also, the bird warns the rhino of danger by chirping.

SYMBIOTIC RELATIONSHIPS IN THE INSURANCE INDUSTRY

Insurers and intermediaries have an obligatory symbiotic relationship. None of the parties can survive without the other. Indeed some global reinsurance markets cannot be accessed without the services of brokers.Intermediaries traditionally include brokers and agents and are regarded by insurers as business producers. They o�er information and other services in connection with the solicitation, negotiation and sale of insurance.In the primary insurance policy brokers act on behalf of the insured while agents represent the insurers.However, a broker’s role may change during an insurance transaction and over the course of an on-going relation-ship with a client. Many brokers sometimes act as an agent of the insurer and other times as a broker of the client. Whilst the intermediaries are business producers the insurers and reinsurers provide risk coverage therefore the two depend on each other for business survival.Over the last two decades, many direct brokers have developed services that go beyond the mainstream services related to the transferring of risk from insureds to insurers.Brokers now o�er services such as risk survey, evaluation and implementation of alternative means of funding for potential losses, risk management strategies, claims man-agement and facilitation of premium �nancing with the banks. As a liaison between consumers and insurers brokers responsibilities do not begin or end with the sales, but rather encompass an array of tasks that include every-thing from �nding new clients to maintaining existing ones. Brokers furnish insured’s with the proper documents necessary to apply for new insurance policies and, when necessary, make changes or adjustments to existing coverage. Most importantly they assist the insured in complying with the duty of utmost good faith in terms of disclosure of material facts at the point of initial buying and renewing policies.Brokers guide clients in determining the adequate policy from a range of products they also collect premiums. Where binder authority exists the broker enjoys delegated authority to underwrite risks on behalf of the insurer. Rein-surance brokers solicit, negotiate and sell reinsurance cessions and retrocessions on behalf of ceding insurers seeking coverage with reinsurers. They participate in the chain value from treaty design to placement; o�ering after sales services in administration of the treaties including rendering accounts, premium collection and claim services.

OBLIGATE AND FACULTATIVE SYMBIOTIC RELATIONSHIPS

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IMPLICATIONS OF BREXIT VOTE ON EAST AFRICAN ECONOMIES

THE POWER OF GIVING he best and lasting joy is found not in receiving but ingiving. This is because when we give to meet the needs of others we are acting like God. We should give for the sake of giving and making the recipient happy.

John 3;16 For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life

$400 million Rwanda's Eurobond, yield jumped by 27 basis points to 7.59 per cent. The bond was issued in April 2013 at 6.85 per cent. Ethiopia's $1 billion 2024Eurobond yields climbed 10 basis points to 7.98 per cent.Tanzania, for example, is considering postponing its �rst infrastructural Eurobond partly due to these uncertain-ties. Uganda will also struggle to attract investors aimed at �nanc- ing its expansive budget for the newly discov-ered Oil activities like the proposed re�nery;One of Kenya's top exports, cut �owers, could su�er. Overa third of the EU's cut �ower imports come from this East African country. The UK and the Netherlands are the top destinations for Kenyan exports, mainly �owers. If a trade deal between the East African Community and the EU is stalled because of Brexit Kenya could lose 4 billion Kenyan shillings a month, according to the association.

he historic referendum when the UK voted to leave the European Union has impacted many countries beyond Europe. More than 17 million people voted in the referendum to exit the European Union. The leave voters argue that the EuropeanUnion has changed enormously over the last four decades with regard to the size and the reach of its bureaucracy, diminishing British in�uence and sovereignty. The immi-gration crisis in Europe was a trigger. Some EU leaders argued that aiding the refugees was a moral obligation. But EU opponents saw immigration as a national issue, as it a�ected the internal life of the country. Steering clear of this issue was an important driver for the "leave" vote. The East African economies are grappling with the conse-quences of the Britain's exit from the block.Like other major central banks in the world, the central bank of Kenya has put in place the interventions to mitigate negative impacts on the money and foreign exchange markets to ensure their smooth operation. The more immediate shock for East Africa is in the form of currency exchange. The US dollar has gained substantially while the Euro and Pound have fallen hard. The pound has dropped to a 31-year low resulting in most banks temporarily suspending transac- tions in the currency.Safaricom which is the biggest company in Kenya, is 40 percent owned by Vodaphone. Diageo, which is a U.K.-based company, has a majority shareholder in East African Breweries East Africa, a region with a strong British colonial legacy is also facing uncertainties caused by the increase in bond pricing.

WHY WE GIVE

Acts 20:35... you ought to support the weak/poor and to remember the words of the Lord Jesus, how he said, It is more blessed to give than to receive.

Deuteronomy 15:11For the poor will never cease to be in the land………. therefore you shall freely open your hand to your brother, to your needy and poor in your land.In Luke 9:16 the little boy gave his lunch to Jesus. The lunch box contained two �shes and �ve loaves of bread however, in the hands of Jesus it was enough to feed �ve thousand men excluding women and children and twelve take-home baskets. When we give for the love of the recipient and not for sel�sh motives God enlarges our giving to help many people.

Proverbs 19:17) He who is kind to the poor lends to theLord, and he will reward him for what he has done"

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CONTRIBUTORS

HOW TO GIVEOur good deeds should be motivated by a sincere desire to help others. Public recognition should not be the goal. Matthew 6:1-3 Be careful not to do your 'acts of kind- ness' before men, to be seen by them. If you do, you will have no reward from God in heaven. "So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men. ………….. But when you give to the needy, do not let your left hand know what your right hand is doing.

2 Corinthians 9:7 Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. We can learn to be a cheerful giver by studying the greatest giver this world has ever known: Jesus Christ. Leaving behind the riches and glory of His heavenly kingdom, He came to Earth and willingly gave His life so that we could keep ours

Mark 12:42 But a poor widow came and put in two very small copper coins, worth only a few centsJesus commended this widow because she gave from her heart and therefore her best.the wealthy man apparently gave more however his motive was to show o� his wealth and to feign piety.

Deuteronomy 15:10"You shall give generously ……. and your heart shall not be grieved when you give to him, because for this thing the LORD your God will bless you in all your work and in all your undertakings

WHO TO GIVEThe Holy Spirit will direct you on whom to give. In society we have vulnerable people like orphans and widows. This would be in the context of young children living in children institutions and widows and other helpless individuals in dire situations.James 1:27 Pure and unde�led religion before our God and Father is this: to care for orphans and widows in their distress……..Mathew 25:35 For I was hungry and you gave me food, I was thirsty and you gave me drink, I was a stranger and you welcomed me, 36 I was naked and you clothed me, I was sick and you visited me, I was in prison and you visited me

WHEN TO GIVEGiving should be timely and respond to the prevail-ing need. For example if a student is in need of examination fees this help will be required immedi-ately ;giving the money later will not help...Proverbs 3:27-28 Do not withhold good from those to whom it is due, When it is in your power to do it.28 Do not say to your neighbor, "Go, and come back, And tomorrow I will give it," When you have it with you.…

Giving should be something tangible, something mate-rial, not simply a kind word,Each of us has something to give. Some have wealth, some have talents, some have time. Whatever gifts we have been given -- large or small -- we should share generously. When we do, we make the world better for someone else and �nd true meaning and satisfaction in our own lives. We should give generously of whatever wealth and abili-ties we have, no matter how small the amount

James 15 – 16 Suppose a brother or sister is without clothes and daily food. 1 If one of you tells him, “Go in peace; stay warm and well fed,” but does not provide for his physical needs, what good is that?

WHAT TO GIVE……..act now

Esther Muhindi Ben Kajwang Sharon MuhindiOscar Kagwa Jane Waweru

LEVITES INTERNATIONALREINSURANCE BROKERS LIMITED

Email: info@levites.com, Website: www.levitesre.com

https://twitter.com/LevitesReBroker https://www.facebook.com/Levitesre

Levites International reinsurance Brokers Ltd.Chiromo Court, Chiromo Road, Westlands,P. O. Box 694 - 00517, Nairobi KenyaTel: 020 - 2190249 | 0202639334Cell: +254 734 994 471, +254 722 721 606

Kampala OfficePlot 12A Turfnell Drive KamwokyaCell: +256 765 282 701, 3182 284 682

Dares Salaam OfficeP. O. Box 21415 Dares SalaamMikocheni A Msonge StCell: +255 784 888 886