2024 is likely to be good for Africa Re, which has recovered from the losses of 2022, according to Mr Corneille Karekezi, group managing director and CEO of the reinsurer.
He was speaking to AM Best TV at the Rendez-Vous de Septembre conference in Monte Carlo.
In the interview, he spoke of Africa Re bursting through that $1bn mark in terms of the top line in 2023. According to a transcript of the interview published by AM Best, he said, “The driver of that growth has been our resilience in terms of growing a diversified portfolio. It's necessary for a middle-range insurer, like Africa Re, operating in a continent where currencies have been falling to have a diversified portfolio from the market of Africa with 54 countries.”
“You have to be extremely diversified so that when the big economies like Nigeria, Ethiopia, Egypt, when their currencies are falling, you can catch up with other currencies which are mildly falling. Also, you have to have a component of international business, which has been doing well in terms of top line because of the hard market in which we are. So, those are the drivers – diversification on the continent, as well as growth in the international business.”
He added that diversification is not only by geography but also by line of business. He mentioned as well the portfolio which is written in US dollars and settled in US dollars. “That is mainly the oil business on the continent and some infrastructures. You have to have really strong growth on those which are facultative businesses. This has been very good for Africa Re in 2023.”
Interim financial results
In a media statement on its 1H2024 financial performance, Africa Re said that it recorded Gross Written Premiums of $558.74m for the first six months of this year, translating to 5.56% growth from the $529.33m reported for the corresponding period in 2023 under IFRS 4. The statement said, “This was mainly due to successful marketing efforts, positive pricing momentum, and moderate economic growth witnessed by most African countries despite continued challenges posed by the ongoing geopolitical tensions, extreme weather conditions, fiscal policy tightening, inflationary pressures, high levels of sovereign debt, and depreciation of major currencies.”
The strong top-line performance translated into a net underwriting result of $54.04m for 1H2024, an increase of 69.03% year on year. The net combined ratio under IFRS 4 at the end of the second quarter of 2024 stood at 87.54%, down from 91.52% recorded in the corresponding period of 2023. “This performance was driven by our diversified portfolio through stronger net retention ratio, growth in net earned premium, favourable claims experience, and controlled expense ratios,” said Africa Re.
The company’s net income surged by 75.42% year on year to $85.09m for 1H2024.