By AGENCIES
AFRICA’S largest reinsurance firm, African Reinsurance Corporation (Africa Re), has continued to maintain a brilliant performance and strong capitalization, thereby retaining its top ratings in fresh reports recently released by Standard & Poor’s (S&P) and A.M Best, global credit and insurer rating experts.
Standard & Poor’s, a division of McGraw-Hill Companies has assigned a Stable A- rating to Africa Re’s operating structure, affirming its strong financial strength, counterparty credit rating, diversified competitiveness in the African insurance markets and impressive business outlook.
“Africa Re continues to be supported by strong capitalization, including a growing level of capital redundancy which is supportive of future premium growth. On December 31, 2011, Africa Re’s capital adequacy was redundant to 40% above the A rating level.
Its capital adequacy was boosted by recent capital injection, primarily from existing shareholders. Capitalization is also supported by appropriate reserving policies and retrocession protection.”
As a regional reinsurer, Africa Re’s operating performance remained strong and stable, improving its net combined ratio in 2011 to 92 percent below its already-strong five-year average. Also, its return on revenue improved to 13 percent in 2011 from 9 percent in 2010, with strong competitiveness across the African market netting approximately 10 percent market share.
African Reinsurance Corp enjoys financial flexibility and credit worthiness, and follows good corporate governance procedures.
S&P noted that, Africa Re’s corporate governance procedures are in line with accepted international standards.
The Company benefits from its limited investment risk appetite, predominance of short term non life insurance and a large capital cushions.
Its dedicated risk management team headed by a chief risk officer is well integrated into daily business management and supported by robust supervisory controls.
“The Corporation continues to improve its capital modeling capabilities and operational risk system, moving towards a model that allows the risk management team measure capital requirements for investment and underwriting risk. Its personnel have also been educated to identify and assess risks and controls.”
Africa Re is an international financial institution with its Headquarters in Lagos, Nigeria. It has six regional offices and two subsidiaries in Johannesburg and Cairo. It is owned by 41 member states of the Africa Union, African Development Bank and a number of other global financial institutions.
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