Africa Reinsurance retains 28 per cent of shareholders’ fund

Africa Reinsurance Corporation held about 28 per cent of the total African shareholders’funds as at 2015, the Managing Director, Corneille Karekezi, has said.

Karekezi, who stated this in Lagos, last week, said the corporation was able to secure reinsurance premiums on the continent as a result of its huge shareholding in the company.

He said, without this capacity and given the relatively undercapitalisation of African reinsurers, which stood at average solvency of 85 per cent in 2015, more reinsurance premiums would have exited the continent to overseas reinsurers.

He said last year, although the corporation’s gross turnover exceeded US$ 642 million, only 9.5 per cent of this income came from mandatory cessions in the 41-member countries, the bulk income came from North Africa, saying that the corporation has been carrying on the reinsurance business in the African continent in the past 41 years

Karekezi said: “This journey of dedicated service to the insurance industry has contributed in no small manner to the economic development of the continent. The main purpose for the establishment of the corporation in 1976, was to prevent capital flight from the African continent, a practice which was massively prevalent in the 1960s and 1970s, and which still persists nowadays, though in a reduced way.

“In addition, Africa Re’s mission includes the development of the insurance and reinsurance industry in Africa, promoting the growth of underwriting and retention capacities across the continent, and supporting African economic development.

Karekezi saif the pursuit of this mission has been the sole focus of the Board of Directors, management and staff of the corporation over the years, addig that from the onset, Africa Re’s mission in Africa is unique in that it sets itself apart from the rest of the industry and clearly defines its responsibilities vis-à-vis the development of the African continent.

He said the corporate mission also informs its legal status and shareholding size and structure, including its 41 African states. As a result, the Corporation enjoys a large acceptance across the continent and this has allowed it to concentrate up to 28 per cent of the total African shareholders’ funds in 2015, an indication of its weight in the total African underwriting capacity. Without that capacity, given the relatively undercapitalisation of African reinsurers (average solvency of 85 per cent in 2015), more reinsurance premiums will leave the continent to overseas reinsurers.

“Africa Re believed in the continent before anyone else and it demonstrated that by opening offices and subsidiaries, today at the number of eight, long before the ‘Africa Rising’ narrative started recently. After more than four decades of determination and focus, Africa Re is now the leading African reinsurer on the continent,” he added.

Advertisements