Africa Reinsurance Corporation (Africa Re), the leading African reinsurer, has reported a record profit for the second consecutive financial year in 2024 which amounted to $132.36m compared with $128.45m in 2023, translating into an increase of 3.05%, a demonstration of its resilience.
This was despite the significant negative impact of currency depreciation from core markets, Africa Re said as it released preliminary and unaudited figures under IFRS 4. Africa Re reported a huge net foreign exchange loss of $41.73m in 2024 from net foreign exchange gains of $1.36m posted in 2023.
Africa Re has continued on its growth trajectory by recording Gross Written Premiums of $1.21bn in 2024, representing an annual growth of 9.76% compared to $1.11bn recorded in 2023. “This growth reflects the corporation’s successful and sustained marketing efforts to expand existing business organically and acquire new business across product lines and locations,” said Africa Re.
The reinsurer said, “In 2024, the reinsurance market continued to strengthen, driven by robust demand, moderate economic growth in our core markets, improvement in premium rates, terms and conditions."
It added, "Without the depreciation of major currencies in our core markets, at constant exchange rates of 31 December 2023, a Gross Written Premium of $1.28bn would have been achieved at a growth rate of 15.55%.”
Underwriting performance
Africa Re achieved another strong underwriting performance in 2024 due to its underwriting discipline, better price adjustments and well-diversified portfolio despite the impact of some natural catastrophes, especially the unprecedented February and April floods in the UAE, Cyclone Belal in Mauritius as well as some other major losses reported in 2024 that are all within its risk appetite and protected by its retrocession arrangements. Net Incurred claims for the year 2024 amounted to $540.85m (2023: $507.36m).
Overall, Africa Re ended the year with an improvement in its net combined ratio which improved to 90.89% (2023: 93.51%), with a net underwriting profit of $87.34m (2023: $54.81m), representing an improvement of 59.37%.
Investment income
The corporation also surpassed the historic investment income posted in 2023 with another record in 2024. Investment and other income achieved in 2024 stood at $89.33m compared to $73.17m in the previous year, indicating an impressive growth of 22.07% year-on-year. This performance is explained by an active management of the investment assets, improved financial markets’ performance and the robust investment strategy in place.
Despite significant foreign exchange losses on some assets, the investment portfolio grew by 11.14% from its position as of 31 December 2023 due to more aggressive liquidity management and the compounding effect of investment returns.
Group MD and CEO, Dr Corneille Karekezi, commenting on the performance, said that 2024’s strong performance, which reflects the reinsurer’s “growing footprint in diversified markets in Africa and other markets, disciplined underwriting approach, effective risk management strategies, and prudent investment practices”.
Looking ahead
He said, “Our results demonstrate the strength and resilience of our business model, and we are confident in our ability to maintain this momentum moving forward.
He added, “Africa Re remains optimistic about the reinsurance market, despite uncertainties surrounding global economic conditions, natural catastrophes, currency depreciation, geo-political tensions and sovereign debt distress. The company is focused on maintaining its disciplined approach while capitalising on emerging opportunities and navigating the market cycles”.