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WAICA Re Plc lost $2bn to Nigeria’s currency devaluation in 2016 —CEO

Mr. Abiola Ezekiel Ekundayo, Managing Director of WAICA Reinsurance Corporation Plc speaks on the impact of the company in Africa’s economy, and more.

By Favour Nnabugwu

WHAT is WAICA Re’s performance in 2016?

As at the end of the day we are able to close on a very sound note. We increased the premium income from $33.5million in 2015 to $49.6million in 2016 which is about 35 percent growth.

We had a lot of challenges last year especially for Nigeria because of the devaluation of the currency, we suffered a lot of loses based on that. The premium income from Nigerian reduced by almost 50 percent because we normally report in dollars, any devaluation anywhere in any of the operating countries affect the company.

We lost over N2billion in our account in Nigeria with the devaluation of the currency from N198 to N360/USD. We tried as much as possible to convert all our naira to dollars in that bid and what happened in Sierra Leone too because the currency was also devalued as a result of the problem they had during the Ebola, though, Sierra Leone tried to reconstruct the economy after the Ebola crisis but it was not easy. We did suffered a loss. We lost about $6.5million exchange at the close of business in 2016 yet WAICA Re was still able to break even; we came out with a profit of $6.3million in 2016.

Abiola Ekundayo

Another problem we suffered in all the countries was this collectable. Premium is not easy to collect. In Nigeria it is good to some extent, in Ghana it is because of the premium low cover syndrome but in other countries it is not easy especially in the Diaspora. When we say Diaspora, it means all other countries, the French speaking countries, it is not easy to collect money and you know when you are not collecting money you are losing investment income on that money so by the time you collect it, the value must have gone down especially what happened to us in Nigeria and Sierra Leone.

But like I said, we thank God that at the end of the day in 2016, it was tough and rough but we were able to break even.

What strategies have you put in place to avoid recurrence of loss?

What we are doing to prevent or minimize the loss because we cannot entirely prevent it, we can minimize the effects of the exchange loses that we suffer, since our operations are denominated in dollars, we convert whatever local premium we have to dollars.

And now we have put in place a credit control system whereby we have somebody dedicated for that function to go out and collect money every time in order to reduce the effect of such loss in 2017.

How do you rank WAICA Re among the regional insurance companies?

We are doing well, in 2014 we won the best regional company of the year in West Africa and we have the certificate to prove that. If you have been reading Atlas magazine, you will be surprised where we are, they ranked us next to a company that has been in operations for over 30years. And they rank them by their paid up capital, premium income among others including market shares of the business.

Like last year we raised additional capital; and if you remembered we raised capital in 2011 when we started with the one we inherited from the pool but the one we inherited from the pool was in naira, so that is the problem we carried till last year, we wanted to keep it like that; if we had met dollars in the account as much as we expected the situation would have changed.

So last year, we raised additional capital, our paid up capital moved from $29.4million to 50million as at last year December. And with that now we have been able to do business even in oil and energy now.

To what extent have you been able to grow your business and how many countries are you operating from at the moment?

When we started WAICA Re, the intention was to go the whole world. As a re-insurance company, one factor that differentiate us is that international model of the business, locally we do insurance but internationally we do re-insurance. You can do your business anywhere. Some people are asking why we set up this company in Sierra Leone because if you look at the economy of Sierra Leone, the country is a small country, the population maybe with the new census, you are talking of 7million, it used to be 5million.

The premium of the country when I came on board in 2011 was about $13million, in Nigeria,  I don’t think there is any company writing less than $13million which is for the whole country but that doesn’t really matter.

We set up there because of the political undertone in it, I mean the President of Sierra Leone is an insurance professional. He is a qualified and chartered insurer. And he has been on top because he is aware, he was a President of WAICA Re so he has been assisting us even up till date. All this profits we make we don’t pay any taxes on it; even as a worker, all the expatriates, all the members from Nigeria, Ghana we don’t pay taxes, and they promised to give us land to build and now we have started our building project.

So when we started we started with West Africa but even that year we were able to write business from all other regions of Africa. But I can tell you that we do business in all countries in Africa and then the Middle East.

Apart from the war torn areas like Syria, Iran, Iraq, where we don’t do business, though, brokers want us to do business in those countries but we do not due to our policies and principles. But we do a lot of business in Saudi Arabia, Dubai and Jordan. Then in Asian countries we do business with Nepal and Bangladesh because they have similarities with what we do here.

So I can conveniently tell you that we do business in all countries in Africa, part of the Middle East and part of Asia.



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