OREANDA-NEWS. Fitch Ratings says in a new report that Kenyan insurers' attractiveness for foreign investors has been supported by the relative market sophistication in Kenya, and access to the greater East African region.

Investors' appetite for acquisitions in the insurance market has pushed up valuations significantly. Although premium and profit growth rates may support valuations, Fitch believes that future M&A activity will focus on the consolidation of smaller licences.

The agency believes that the Kenyan insurance market would benefit from further consolidation as insurers seek to improve scale. The market consists of a large number of insurance companies, making it fragmented and competitive.

Poverty remains one of the major reasons for low insurance penetration in Kenya. Despite strong economic growth (2014 GDP growth: 5.3%), per capita wealth is low by global standards.