Africa Re smashes billion-dollar milestone

Africa Re smashes billion-dollar milestone | Insurance Business New Zealand

Reinsurance

Africa Re smashes billion-dollar milestone

“Growing the top line” more challenging than expected, CEO says

Reinsurance

By
Kenneth Araullo

Africa Re has announced its preliminary financial results for the year 2023, noting a historic milestone as it crosses the billion-dollar mark.

It reported a gross written premium (GWP) of $1.106 billion, marking an annual growth rate of 16.25%, which it says notably exceeded its forecasts for the year. This growth was attributed to effective marketing strategies, new business acquisitions, favorable market pricing, robust re’ demand, and moderate economic expansion in key markets.

Adjusting for constant exchange rates at the end of 2022, the GWP could have reached $1.199 billion, reflecting a growth rate of nearly 25.92%. The company attributed this to its underwriting discipline, strategic price adjustments, and a diversified portfolio.

Significant claims from earthquakes in Türkiye and Morocco were mitigated by the company’s risk management strategies, it claimed. This led to an improved net combined ratio of 93.51% for 2023, down from 94.45% in 2022, and a net underwriting profit of $54.806 million, up 33.68% from the previous year.

Africa Re also saw an increase in investment and other income, totaling $73.873 million for 2023, compared to $13.124 million in 2022. This 462.88% improvement reflected a recovery from capital losses incurred in the previous year and benefits from a high interest rate environment.

Group MD/CEO Dr Corneille Karekezi expressed pride in the company’s achievements.

“As we report our financial statements in US Dollar and the vast majority of our business is originally denominated in African currencies, growing the top line has been more challenging than we expected,” Karekezi said. “Crossing that milestone is a testimony of the resilience of the corporation in face of the continuous depreciation and devaluation of our operating African currencies against the US$ since 2015, as well as other macroeconomic challenges including geopolitical tensions, low economic growth and sovereign debt crisis.”

Africa Re reported a net income of $129.145 million for 2023, an improvement of 444.16% compared to $23.733 million in 2022. The insurer’s capital position has strengthened, with a 6.95% growth in Shareholders’ Fund, restoring its return on average equity to 12.59%, an increase from the average of 5.16% recorded between 2018 and 2022.

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