Mr. Gamal Sakr, Associateship of the Chartered Insurance Institute (ACII) and The Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and The regional director of Africa Re, discusses the shape of insurance and reinsurance in the region post covid-19.
Mr. Sakr also highlights his participation in Sharm-Rendezvous and talks about his wide experience in the regional market as well as Africa Re’s most recent projects.
* Who is Africa Re?
African Reinsurance Corporation (Africa Re) is the leading pan-African reinsurance company and the largest reinsurer in Africa in terms of net reinsurance written premiums. Africa Re was set up by 36 African states in 1976, following a recommendation by the African Development Bank (AfDB), with the mission of developing the insurance and reinsurance industry in Africa through increased underwriting and retention capacities, and support to African economic development. Ranked 38th in the 2018 Standard & Poor’s Global Reinsurance Groups and 41st of the Top 50 Global Reinsurance Groups by AM Best in 2018, Africa Re has a broad-based shareholding: 41 African member States (33.59%); the African Development Bank (8.42%); 114 African insurance and reinsurance companies (33.84%); and 3 non regional shareholders (23.15%), including leading global insurers and reinsurers from France (AXA), Canada (FAIRFAX) and Germany (ALLIANZ SE). With headquarters in Lagos (Nigeria), Africa Re operates through six (6) Regional Offices across Africa: Casablanca (Morocco), Abidjan (Côte d’Ivoire), Nairobi (Kenya), Lagos (Nigeria), Cairo (Egypt) and Ebene (Mauritius), and a new office in Dubai established in December 2020.
* Sharm-Rendezvous is happening for the third time in Egypt, why are you participating and what is your feedback?
For us at Africa Re, Sharm-Rendezvous is a great opportunity to see the people and interact with them after 2 years of virtual meetings and working remotely. It was a positive surprise to reach Sharm El-Sheikh and witness the great number of participants in this event since it was a bit risky due to covid-19, as we know conferences were canceled or held virtually in other parts of the world, and this is why what was done here is outstanding.
* Reinsurers have been expecting a hardening in the market, what is your opinion regarding this matter?
In my modest opinion, I don't think the marketing is going to be hardening soon. If I speak about the Egyptian market or the Middle East market in general, I can see it somehow stabilized. Let's take for example the Lebanese market, after the Beirut explosion we thought that there is going to be a big jump in prices, and it ended up staying within the margins. So I don't expect any hardening in the market, except for maybe oil and gas. As a reinsurer, we are not very pleased about the softness of the market and we've been declining business recently, if this capacity is still going to be present it's hard to see any hardening in the market soon.
* What were your results for the first half of 2021?
Africa Re recorded a gross premium income of US $421 million in the first six months of 2021 compared to us $393 million reported in the same period of 2020. We attribute this 7.2% growth in GWP to the ongoing recovery of businesses and society from COVID-19, supported by additional facultative acceptances mostly in the oil & gas portfolios. The year-to-date claims experience as measured by the net incurred loss ratio similarly improved to 61.9% compared to 64.6% in the same period of 2020, helped by the restructuring of previously poor performing portfolios. The expense ratio did however increase from 24.4% to 28.5% for H1, due to a 22% in business acquisition costs and the increase in the top line, combined with higher than usual profit commissions paid to ceding insurance companies. But the combined ratio for the six-month period still improved to 96.9%, compared with 98.1% in H1 of 2020. We are satisfied with our results and we hope to maintain our growth rate.
* Egypt has achieved impressive rates of economical growth during the past two years, what are the reasons behind it and how does it affect the reinsurance business?
The Egyptian government has adapted an expansion policy and that was the game changer. While most of other countries had negative growth levels, Egypt has achieved 2,9 growth level which reflects the efforts and the correct strategic and economical planning of the government. If you look at the annual report of the regulator's market in Egypt, you can notice a very good level of growth in the insurance sector as well, which is definitely positively affected by the economical growth. The problem in the Egyptian market is the big number of insurance companies who are fiercely competing, which results in rate cutting and maybe losses at the end, so this is what we should be attentive to.