Mauritius-based insurer MUA Limited is weighing recapitalisation of its Kenyan subsidiary following the uncovering of Sh1.6 billion hidden liabilities through a forensic audit that was concluded last year.
The group, which has operations in six countries including Mauritius, Uganda, Rwanda, Tanzania and Seychelles, says its Kenyan unit remains under pressure due to foreign exchange losses and under-capitalisation.
MUA says in the latest review of operations in 2025 and the first quarter of 2026 that the under-capitalisation of the Kenyan arm has constrained growth and customer acquisition and it is working with the regulator to resolve the issue.
“MUA Kenya’s profitability remained under pressure due to foreign exchange losses and lack of scale, which itself is a result of regulatory challenges in the recapitalisation of the entity. We are working with the authorities to resolve this,” said MUA in a market update.
MUA Group, which owns 66.38 percent stake in MUA Kenya, said in last year’s forensic auditing findings that it discovered that between 2017 and 2020, reinsurance balances in the Kenyan unit were “significantly overstated” through inaccurate accounting.
The overstatement of reinsurance balances meant the company was recording higher than expected recoveries from reinsurers yet in reality, it owed more.
The misstatements left it with inflated assets and understated liabilities, leading to a Sh1.63 billion write-down to correct the issue. This left it requiring fresh capital. MUA is working with the Insurance Regulatory Authority to resolve the challenge.
“At group level, our key remaining challenge continues to be the under-capitalisation of our Kenyan subsidiary which is a major hurdle for its customer acquisition efforts. We are confident that our actions to solve this issue, in cooperation with the Kenyan regulator, will be effective,” said MUA.
Latest IRA industry data shows MUA Kenya (which offers general insurance) closed March 2026 with a negative equity of Sh359.92 million, with accumulated losses having hit Sh2.19 billion.
The Mauritian firm entered Kenya in 2014 by acquiring Phoenix of East Africa Assurance Company and renaming it MUA Kenya.
The local operation in July 2020 then acquired Saham Kenya for $12.325 million (Sh1.59 billion) and integrated it into the entity that continues to trade as MUA Kenya.
MUA said its East African operations posted a marginal loss of one million Mauritian rupees (Sh2.73 million) last year compared to a profit of 15 million Mauritian rupees (Sh41 million) in 2024, dragged by Kenya and Uganda performance.
The firm said excluding Kenya where insurance revenue declined by 18 percent, the region would have remained profitable given that Tanzania and Rwanda delivered strong growth.
Overall, MUA reported record group profit of 523 million Mauritian rupees (Sh1.43 billion) in 2025, representing a 23 percent increase when compared with 2024. This was supported by improved underwriting performance and growth across other markets.
“This strong performance reflects continued improvement in underlying insurance profitability across most operations,” said MUA.
