Africa Re CEO highlights growth in discretionary businesses and market resilience

Corneille Karekezi, group managing director and CEO of African Reinsurance Corp (Africa Re), said the discretionary business contributed significantly to Africa Re’s performance, showing solid growth.

Talking with AM BestKarekezi (pictured) emphasized Africa Re’s strong positioning in the wider reinsurance market, despite its limited exposure to the US market.

Karekezi noted that globally the reinsurance market has shown improvement, marking the first time in five years that key metrics have turned favorable.

“The turn of the corner is great news for many of our initiatives and our service to society, which is to protect, provide shelter, support economies to grow and to become resilient,” said Karakezi.

He cited growing demand for products that address natural disasters, climate risks and emerging cybersecurity needs. He added that the recovery of Africa Re from the losses of 2022 has strengthened its financial foundation, which supports its goal of protecting and allowing the continued growth of economies around the world.

Africa King surpassed $1 billion in first gross this year, a milestone attributed to the diversified portfolio of the corporation. Karekezi said Africa Re’s resilience comes from spreading risk across the continent’s 54 countries, allowing it to offset currency declines in larger economies such as Nigeria, Ethiopia and Egypt with gains in other regions .

“Also, you have to have an international business component, which has done well in terms of top line because of the tough market we are in. So those are the drivers. The diversification in the continent, as well as the growth in the “international affairs,” said Karakezi.

On diversification by geography and business line, Karekezi highlighted Africa Re’s focus on deals written and settled in US dollars, mainly in sectors such as oil and infrastructure.

“You will have a really strong growth on those that are optional businesses. This has been very good for Africa Re in 2023,” he said.

In discussing Africa’s growing exposure to natural disasters, Karekezi addressed the challenges of capital and risk modeling capacity. He noted that reinsurance has always supported African insurers, with quick response times for claims.

“We have strong support from other insurers,” he said. “The main problem is always the capital and capacity for the model. But every time countries have developed these types of schemes, such as that of Morocco and other countries, so we have responded. An example can be given for the earthquake in Morocco, which we mark the first year”.

Karekezi said that the main limitation is not from the supply side, but from the demand side, since many African countries are still developing the frameworks to use such reinsurance schemes effectively.

“I can say that the speed of implementation and going to market is rather slow. We want to see more and more demand so that we can respond by bringing more capital to support these products,” he said.

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