Page 24 - March 2022 Issue 604 Part 2

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Dr. Corneille Karekezi

(Group Managing Director and CEO - Africa Re)

We expect to cross the one billion premium income

when celebrating our 50th anniversary (golden jubilee)

The African Reinsurance Corporation (Africa Re) is the leading pan-African reinsurance company and the largest reinsurer in Africa in terms of net writ-
ten premium. Since establishment, its mission has been to: foster the development of the insurance and reinsurance industry in Africa; promote the growth of
national, regional and sub-regional underwriting and retention capacities; and support African economic development. Being the leading reinsurer in Africa, deliver-
ing outstanding quality service to customers and other stakeholders is the main priority of Africa Re, which always strives to conduct its business following the highest
standards of professional behavior and ethics. The Corporation continues to foster trust and collaboration to develop leaders focused on sustainable and superior per-
formance. Africa Re acknowledges the weaknesses within the insurance industry value-chain and creates ethical and forward-thinking solutions to overcome them.
Al Bayan Magazine met with Dr. Corneille Karekezi, Group Managing Director and CEO of Africa Re and conducted the following interview.

We are an industry known to absorb and adjust to these challenges rating agency, Standard & Poor’s in 1998 and is now rated “A –“ (Strong / Stable Outlook).
We are also rated “A” (Strong / Stable Outlook) by AM Best. The Corporation remains the
* In your opinion, has the insurance industry been affected positively or neg- only reinsurer from the Middle East and Africa that is so highly rated by both leading rating
atively by Covid-19? agencies.
Dr. Corneille Karekezi (CK): There have been too many challenges since 2020 due The growth of the Takaful Industry across the globe and the need to have solid high-
to the Covid-19 pandemic. These challenges have led to volatility, uncertainty, com- ly rated Retakaful operators that fill the gap in the Retakaful capacity and decrease
plexity and ambiguity in the global economic environment impacting all sectors the reliance on conventional non-sharia compliant capacities inspired Africa Re to
including the insurance industry. However, for insurers, the pandemic has brought establish its biggest Retakaful subsidiary in Africa - Africa Retakaful Company.
more opportunities than challenges. We are witnessing growing demand for rein- Accordingly, Africa Retakaful Company was established in 2010 as a wholly-owned
surance. There is accelerated digitization with the entire industry adapting to the subsidiary of Africa Re operating from Cairo (Egypt). The subsidiary offers various
new requirements of working online, remotely serving clients using electronic pay- retakaful products that are sharia compliant and essential for takaful companies to
ments. These are among the numerous initiatives which have been beneficial to the meet their business needs. The Corporation is also leading the exploration and
industry. On the other hand, the legal interpretation of insurance contracts led to exploitation of Distributed Ledger Technology using blockchain in the African insur-
unintended claims exposure. These exposures are however within the underwriting ance industry with the leading global insurtech company Blockchain Insurance
capacity and capital strength of reinsurers. The industry has also adjusted through Industry Initiative (B3i). This has the potential to reduce moral hazards, manage
a review of contract wordings and hardening of premium rates where possible. complex risks, lower frictional costs and strengthen transparency in the value chain.
Despite the slow progress of vaccination campaigns, there have been significant
improvements in movement restrictions and the economic recovery has begun, Our 50th anniversary (golden jubilee) in 2026
although it is difficult to predict when we will return to pre-pandemic levels. The sit-
uation has become more complex with the interaction of other emerging shocks dri- * In five years you will be celebrating Africa Re’s 50th anniversary. Is there any
ving inflation and commodity prices to high levels. However, there is growing strategy until then?
demand for reinsurance as the risk landscape and uncertainty evolve. We are an CK: With the disruptions from Covid-19, we recently refreshed our strategy and we have
industry known to absorb and adjust to these challenges. a newly approved 2022 – 2025 strategic plan that is anchored on portfolio optimization,
product innovation and market expansion. With our financial projections, we expect to
Capital growth from US$ 3 Million in the beginning to over US$ 1 Billion in 2020 have crossed the US$ 1 billion mark in premium income when celebrating our 50th
anniversary. This will be a big deal for Africa Re because each year instead of growing
* To what extent are you satisfied with all the achievements of Africa Re? by 13 percent, the average growth rate of our premium income in local currencies, we
CK: Africa Re has been in the business for over 45 years and this by itself is a huge achieve- have recorded much slower growth with declines in some years in US dollars due to the
ment. We started with initial share capital of US$15 million in 1976, which has now grown to devaluation of African currencies. For example in 2020, we declined by 4 percent and
US$ 500 million as of 2021 in an environment that is volatile politically and economically. We in 2021 we grew by 5 percent despite the much stronger growth in local currencies. We
write business in local currencies and African currencies have had the worst performance in also think that we will be the only reinsurer on the continent to do so profitably as a
the past two decades due to significant devaluation across most markets. Despite all that, our demonstration of our resilience and robust market knowledge.
growth has been steady. In 2021, our gross written premium grew by over five percent with
the bottom line remaining strong and comparable with regional and international reinsurers. We will continue to approach the market cautiously with the
Our historical performance has been adjudged as one of the best in the world in our industry. four commandments of reinsurance
The Corporation has gone through different stages of growth from its turbulent begin-
nings in a difficult operating environment to a resilient market leader ranked among the * How much are you satisfied with your presence in the GCC region?
leading global reinsurance groups according to AM Best (Top 50 Global Reinsurance Any other expansion plans?
Groups by Gross Written Premium) and Standard & Poor’s (Top 40 Global Reinsurance CK: Africa Re has been writing business from the Middle East for many years. To
Groups by Net Written Premium). Africa Re operates from over eight (8) major cities consolidate our client relationship and optimize our portfolio, we made a strategic deci-
with a blend of subsidiaries, regional offices, contact offices and underwriting repre- sion to be closer to the market by coming to the Dubai International Financial Centre. Our
sentative offices. Beyond its direct economic contribution, the Corporation also has a presence in the region started in 2020 and we have surpassed our short-term goals and
fully functional foundation that supports initiatives that strengthen economic develop- objectives. We will continue to implement our refined strategy for the region as we find it
ment and social programmes on the continent for different industry stakeholders includ- closer in structure to the African markets and it is a possible growth frontier for the
ing industry regulators. Corporation. We will also continue to approach the market cautiously with the four com-
As part of its response to the Covid-19 pandemic, the Africa Re Foundation pledged US$ mandments of reinsurance recommended by Warren Buffet in our rear-view mirror that
3.32 million to Africa Centre for Disease reflects the focus on developing underwriting expertise, prudent reserving practices, risk-
Control, 41 insurance associations and 8 host
cities of the Corporation. The disbursement of appropriate pricing and having the discipline
these funds is ongoing. Another market devel- to walk away from a business if the appropri-
opment initiative is the Young Insurance ate premium cannot be obtained for conven-
Professional Programme which shortlists tional and takaful products.
1000 young professionals for a year-long Concerning our expansion plans, we will
online training covering 13 different courses continue to consolidate our presence in
on insurance and reinsurance with an addi- the African market and to explore oppor-
tional 14th course on leadership and man- tunities in the Middle East and Asia. The
agement. This is part of our capacity-building Middle East has shown promising signs
commitment to the market that complements and we will continue to deploy the neces-
our bespoke technical assistance pro- sary resources to expand our product
grammes. We continue to fulfill our mission offerings as we expand our client base.
by creating local capacity, improving premium There are also opportunities in the Asian
retention and investing on the continent. Africa market, especially China and we plan to
Re voluntarily submitted to the international conduct a feasibility study into opening an
office in Singapore as we increase our
2022 (¢SQÉe) QGPG - 604 O~©dG - ájOÉ°üàb’G ¿É«ÑdG footprint in that region.

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