The African Reinsurance Corporation (Africa Re), has recorded an overall net profit of $75.4 million at the end of the first nine months of 2023.
The result shows that it grew from an overall net loss of $11.1 million, indicating a marked improvement of 697.9 percent compared to the loss recorded at the end of the same period in 2022.
The reinsurer also recorded a Gross Written Premium Income (WRPI) of $ 806.5 million for the first nine months of 2023 representing 18.9 percent growth over the $677.8 million reported for the same period of 2022.
The management attributed the impressive performance to improvement in underwriting price adequacy and new businesses written in the oil and energy line.
For the period under review, gross incurred claims amounted to $404.4 million at the end of 2023, a slight increase of 4.5 percent over the figure of $386.6 million for the same period in 2022.
“The reduction in the retrocession share of incurred claims (9M 2023: $27.6 million vs. 9M 2022: $62.6 million), combined with the overall increase in claims reported but highly retained by the Corporation (i.e. Turkey and Morocco Earthquakes), led to a Net Incurred Claims totaling $376.8 million in 9M 2023, a 16.2 percent increase over the figure of $324.0 million of 9M 2022.
“With the above underwriting result and an increased net acquisition cost (9M 2023: $169.3 million vs. 9M 2022: $150.9 million, Variation: + 12.2 percent) which follows the growth in the volume of written premium, Africa Re’s Combined Ratio at the end of 9M 2023 stood at 93.6 percent, a moderate improvement compared to the same period of 2022 which was 94.9 percent.
“This led to a significant outperformance of 46.4 percent in net underwriting profit with a reported amount of $39.6 million (9M 2022: $ 27.0 million) after the first nine months of the year 2023.
“Particularly, it is the outstanding performance of the investment income with a profit of $45.0 million (9M 2022: loss of $7.5 million), thanks to a strong recovery from the capital losses suffered in the valuation of the equity and bond investment instruments at the end of the year 2022,” said the management.
Dr Corneille Karekezi, Group MD/CEO of Africa Re while commenting on the performance of the firm, said, “the very good performance in the nine months of the year 2023, as acknowledged by all reinsurance industry analysts and financial rating agencies, is a promising indication for Africa Re that the year 2023 will end at a positive note on the account of the ongoing underwriting price adjustment, the recovery of the global financial markets from the lows of 2022, and a strong reinsurance demand.”
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