Patience Saghana

African Reinsurance Corporation (Africa Re) has signed an agreement with the Government of Ethiopia to open a local reinsurance underwriting office in Addis Ababa.

The company, which has its headquarters in Nigeria, was recently given  A_ rating by a global rating agency Standard & Poors based on its “strong competitive position.

Mr. Bakary Kamara, Managing Director of Africa Re said that the corporation undertook a feasibility study which revealed that Ethiopia has the potential and a well regulated market. “Since there is no locally established reinsurance institution in Ethiopia, we decided to berth and service  insurance companies operating in the country.

The corporation has the ability to provide first class services in Ethiopia. Establishing a local reinsurance here will foster the development of the insurance industry, promote the growth of local and regional underwriting and retention capacities, and support Ethiopia’s economic development”.

He further explained that, Africa Re has a business relationship with Ethiopian Insurance Corporation (EIC) and other insurance companies in Ethiopia.

He recalled that, Africa Re was one of the reinsurers of EIC that stepped in with respect to the insurance coverage following the Ethiopian Airlines plane crash, off the coast of Beirut.  Africa Re has a capital base that allows it to take on any specific risk and reinsure other insurance corporations with which it has a business relationship.

The Chairman of United Insurance S.C. and President Ethiopian Chamber of Commerce and Sectoral Association (ECCSA), Eyesus Worku Zafu, was delighted that Africa Re is coming to Ethiopia.

“The formation of Africa Re in Ethiopia, a credible and outstanding reinsurer in Africa will create awareness for the local business people, a platform for exchanging information and job opportunity in the country. Through time, it will construct its own building and carry on various investments,” he enthused.

He disclosed that, Ethiopians need one national reinsurer in the country under the government. “Though we have repeatedly implored government to form a reinsurance corporation, so far there is nothing. The establishment of Africa Re in Ethiopia will save us from going abroad to look for a reinsurer,” he stated.

Mr. Zafu noted that, “in any economy, insurance has a strong place. Forming a reinsurance institution has diverse advantages beyond using it as a risk transfer mechanism.

Depending on the type of investment, investors might face risks like flood, fire or earthquake. So to mitigate the risk, they buy insurance from an insurance company to guarantee against various risks to their property.
These insurance companies in turn buy reinsurance from reinsures.”

Its premium income has grown from USD 46 million in 1994 to more than half a billion USD in 2009 while shareholders fund grew from USD 26 million to 280 million dollars over the same period.
The corporation is now ranked among the top 50 largest reinsurers worldwide on net written premium income.