The African Reinsurance Corporation has announced its financial results for the first nine months of 2023 reporting strong growth in Net Profit, to $75.4 million, a “remarkable improvement” compared to the loss recorded at the end of the same period of 2022.
Africa Re’s Gross Written Premium Income also saw improvement, to $806.5 million, in 9M, representing 18.9% growth over the $677.8 million reported for the same period last year.
According to the reinsurer, “this impressive performance is due to improvement in underwriting price adequacy and new businesses written in the oil and energy line.”
Gross Incurred Claims saw a slight increase of 4.5%, to $404.4 million from the $386.6 million reported in 9M 2022.
Additionally, 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 company (i.e. Turkey and Morocco Earthquakes), led to a Net Incurred Claims totalling $376.8 million in 9M 2023, a 16.2% increase over the figure of $324.0 million of 9M 2022.
Net Acquisition Cost increased from $150.9 million in 9M 2022, to $169.3 million in 9M 2023 which follows the growth in the volume of written premium.
These combined with the reinsurer’s underwriting result resulted in a Combined Ratio at the end of 9M 2023 of 93.6%, a moderate improvement compared to the same period of 2022 which was 94.9%.
This led to a significant outperformance of 46.4% in Net Underwriting Profit with a reported amount of $39.6 million after the first 9 months of the year 2023, compared to the $ 27.0 million reported in 9M 2022.
With a Profit of $45.0 million, Africa Re describes its Investment Income performance as outstanding. The figure compares to the $7.5 million reported as Loss in 9M 2022.
According to the reinsurer, this improvement was thanks to a strong recovery from the capital losses suffered in the valuation of the equity and bond investment instruments at the end of the year 2022.
This boosted the Overall Net Profit at the end of the first 9 months of 2023, which made a remarkable improvement of 697.9% from an Overall Net Loss of US$ 11.1 million reported at the end of the first 9 months of 2022.
Commenting on the company’s performance, Dr. Corneille Karekezi, the Group MD/CEO of Africa Re, 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.”
