Insurance business in Nigeria and most African countries has been noted to be an area treated with cynicism. This was part of discussions when stakeholders in the sector met in Abuja on the way forward. DAVID AGBA reports
The board of Directors at Africa Reinsurance Corporation recently held its 141st meeting in Abuja after which it had a closing cocktail where industry players interacted on issues affecting the industry.
Chairman of AfricaRe, Mr. Hassan Boubrik while addressing the gathering said efforts to increase the penetration of insurance in Nigeria and indeed other African countries must be a collective one.
He therefore called on the federal government, the National Insurance Commission (NAICOM) and insurance operators in the country to join hands together to increase insurance penetration in the country.
The African Reinsurance Corporation was established on February 24, 1976 in Yaounde, Cameroon with an initial 36 members of the then Organization of African Unity (OAU) and African Development Bank (AfDB), with the aim of curtailing foreign exchange outflows from the continent by retaining the substantial part of reinsurance premiums and providing reinsurance expertise to the continent.
He pointed out that Africa is now a giant in reinsurance expertise as the corporation’s shareholders’ equity has grown to $800 million as against the initial $500 million at the inception in 1976.
He maintained that AfricaRe has been recording steady growth in premium income, profitability, assets, solvency, shareholders’ funds over the years, and further cited that to date, it has estimated premium income of over $700 million.
Boubrik, who appreciated the contribution of the stakeholders of the reinsurer to the growth of Africa Re including Africa Development Bank (AfDB), 41 African states, 108 insurance and reinsurance companies, among the shareholders of the group, called for unity to move the industry forward.
He said, “We call on all especially insurance companies, insurance supervisors, and government bodies to work tirelessly to increase the insurance penetration and our population, and to contribute to the provision of risk management solutions to our communities and countries.”
As a composite company providing lifetime covers in over 60 countries spread across Africa, Brazil, Asia and the Middle-east is rated A by Standard & Poors, an international rating agency.
“Africa Re is a major industry in Africa in market share. We are also not just in Africa and the Middle-East in terms of size of premium income estimated at $700 million – one of our own major achievement in our financial rating by Standard & Poor.”
The Group Managing Director of African Re, Mr. Cornellie Karekezi explained why the reinsurers decided to take its board meeting to Abuja this year, “We had our board meetings in Lagos for the last 38 years. And, it is normally a unique opportunity for board directors to interact with staffs that are in Lagos and to interact with the insurance community of Nigeria”.
Though, he admitted that insurance market is in Lagos, saying that the corporation aims to achieve two-pronged targets with the Abuja meeting, “We came to Abuja mainly for two reasons. First, to visit top authorities of Nigeria to discuss some matters of common interest, especially the projects which we intend to do in this country.”
“Two projects are on our minds at the moment. Of course, we are requesting the venue for building residential properties. We have been doing a lot here, and this is our home. We want to relocate our head office to Abuja. It’s long overdue. So, we will come here God willing, in the next two to three years, we’ll build our head office, and that is one of the major relocations we have.”
Africa Re also revealed its plans to take on farmers on large scale farming. Secondly, we have a project to support Nigerian farmers by providing insurance covers against drought and against other diseases. So this will be with the insurance community and our global partners, especially the International Finance Corporation (IFC).
He said government has two major roles to partake in the insurance of agriculture especially to farmers. “One is to allow you to aggregate farmers, co-operatives, and consolidation of land and so on. Two is to support farmers to pay insurance premium. Everywhere in the world, insurance premium for agriculture has picked up, because of the subsidies of the government.”
Speaking on the impact of recession on insurance business especially as it has to do with Africa Re, the reinsurer’s Deputy Managing Director, Mr. Ken Aghoghovbia, said the impact was insignificant to the corporation’s overall business
“Yes. The recession has impacted our operations. In Nigeria, there is a depreciation of the currency because we report in the US dollar. The impact affects not only on liquidity, our balance sheet, but the good news is that even in South Africa, the Rand has steadied. There is marginal appreciation. I think 10.6 percent. In Kenya, the shillings have been stable. In the CFA zone, the currency which is tied to Euro has kind of appreciated against the US dollar.”
“And because of African Re’s diversification, our operations have been relatively stable. There is an impact, no doubt, but it is not as bad as it would have been, it it’s the same story across the board, Aghoghovbia added.
