REINSURANCE
Africa Re CEO: Oil and Infrastructure Drive African Reinsurance Growth
MONTE CARLO, Monaco //BestWire// - Corneille Karekezi, group managing director and chief executive officer, African Reinsurance Corp., said facultative business has shown robust growth, contributing significantly to Africa Re's overall performance. Karekezi spoke with AM Best TV at the Rendez-Vous de Septembre conference in Monte Carlo.
Corneille KarekeziView the video version of this interview here.
Following is an edited transcript of the interview.
Q: We're here in Monte Carlo where a lot of the discussion centers around the preoccupation of North American reinsurers and their exposures. But there's a wider reinsurance market out there. Tell us about some of the things that you're seeing.
A: The wider insurance market has turned the corner for the first time in five years, which is great news for us because we don't write U.S. business, but other continents, yes, we do. The turning of the corner is great news for many of all the initiatives and our service to the society, which is protection, providing coverages, supporting economies to grow and to become resilient.
We are seeing a growing demand in many of those natural catastrophes, climate issues, and emerging products and demand in cybersecurity, for example. We can't be there; we can't be relevant or impactful if we don't have that muscle. This last year, we have recovered from the losses of 2022. 2024 is likely to be good, which means that we'll be building those muscles which are needed by the entire community of economies in the world as we have to protect them and allow them to continue growing.
Q: Africa Re this year, burst through that $1 billion top line. What's been the driver of that growth?
A: 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.
Q: Diversification by geography, but also by line of business?
A: By line of business, definitely for a leader like Africa Re, I have also to mention the portfolio which is written in U.S. dollars and settled in U.S. 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.
Q: We're very aware nowadays of the natural catastrophe exposures in Africa. How good is the reinsurance industry generally at supporting insurance clients in Africa?
A: We have strong support from other insurers. The main issue is still capital and capacity for modeling. But whenever countries have developed those kinds of schemes, like the one of Morocco and other countries, so we have responded. An example can be given for the Morocco earthquake, which we are marking the first year.
Africa Re was there to pay quickly together with other insurers. I think it was really a record time, one month, and everything was paid by reinsurers, including Africa Re. That has demonstrated the need for those kinds of products. The problem is not really on the supply side. It's rather on the demand side.
Africa Re has been helping African countries to develop those kinds of schemes. I may say that the speed of implementation and going to market is rather slow. We wish to see more and more demand so that we can respond by bringing more capital to support those products.
View this and other interviews at http://www.ambest.tv
(By Staff Report, bestday_news@ambest.com)