Catastrophe & large losses mar premium income growth

By: Africa Re

Strong growth in premium income marred by catastrophe and large losses

The leading African re-insurer – African Reinsurance Corporation ( Africa Re ) -posted a premium income of US$517.15 million at the end of the third quarter of 2017, which represents 11.76% growth compared to US$462.72 million at the same period of last year. The strong performance was driven by new businesses in West and Southern Africa as well as the relatively stable African currencies against the US dollar.

However, catastrophe and large losses recorded in South Africa, the middle East and Central Africa led to an underwriting loss of US$24.48 million, compared to last year’s small underwriting profit of US$0.09 million.

Fortunately, investment income kept the momentum witnessed at the end of the second quarter of 2017 and jumped to US$41.38 million at the end of the third quarter of 2017 against the US $ 35.14 million in the corresponding period of the previous year, representing a growth of 17.76%. The strong growth recorded by the Corporation is due to an upward trend in the equity and bonds markets during the first nine months of 2017.

Commenting on the Corporation’s performance at the end of the third quarter, the Group MD/CEO Mr. Corneille Karekezi said: “The catastrophe and large losses recorded during the first three quarters of 2017 have demonstrated the need of reinsurance to support rebuilding communities and businesses’ assets. Africa Re is proud of its timely support towards insurers and affected customers. Despite such significant losses, the Corporation’s outlook for the year end remains positive. We foresee an overall reduced but still good underwriting profit and a strong investment performance for 2017.”