Africa Re CEO Corneille Karekezi has said he is “cautiously optimistic” about the company’s prospects for 2021, following an H1 period that yielded improved underwriting and investment performance, as well as higher profits.
Africa Re recorded a gross premium income of US $421 million in the first six months of 2021 compared to $393 million reported in the same period of 2020.
The reinsurer attributes 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.
As a result, net underwriting profit for the first half of 2021 closed at $9.2 million, outperforming the $5.4 million reported last year by 69.1%.
Investment income for the reported period was also up by 68.3% to $31.3 million, driven by capital gains and improved performance of most equities leading to higher dividend paid.
As a result of the underwriting and investment performance, Africa Re’s net profit for the H1 2021 was $23.7 million, outperforming by 27% the $18.7 million achieved in the same period of 2020.
Commenting on these results, Karekezi, said: “It is pleasing to note that the positive performance achieved in the first quarter of the year is being sustained through the first semester of 2021 and we remain cautiously optimistic for the rest of the year, barring any unforeseen major losses.”