Unlocking the enormous opportunities in the African market will require reinsurers to adapt their approach based on local realities, not the other way around, according to African specialist underwriting agency, Neema Insurance Managing Agency, which has recently celebrated its first year of operations with very strong results.
During an interview with Reinsurance News, representatives from Neema discussed how the company is trying to convince non-African reinsurers of the significant potential for development within the African market.
As a management agency that underwrites business on behalf of re/insurers, Neema has an ambition to bring additional reinsurance capacity to Africa.
Currently, although there is huge worldwide reinsurance capacity, the reinsurance capacity for Africa can be limited for certain classes of business and inconsistent from one year to the next.
Neema attributes the lack of capacity to a wariness among non-African reinsurers due to the minimal underwriting information that is available across much of the continent.
But despite this, demand for protection products like Kidnap & Ransom (K&R) and Political Violence Terrorism (PVT) has been increasing in recent months in certain countries in Africa.
This can be linked to the increased probability of geopolitical conflict, terrorism, and economic disruption, which have been exacerbated by the COVID-19 pandemic.
In 2020-2021, several nations witnessed their people taking to the streets, terrorist attacks and a rise in the number of kidnap and ransom activities.
In light of these issues, Neema’s team have sought to develop solutions that meet the protection needs of the African market, and introduced PVT and K&R to meet the significant demand for these specialty lines.
And already, Neema has partnered with a handful of reinsurers which it believes have sustainable commitments to the African market in the short, medium and long term.
“At Neema, we work with the philosophy that we are a partner of the whole of Africa,” company representatives told Reinsurance News. “We develop binders with reinsurers which not only have the reinsurance capacity but most importantly the risk appetite for African reinsurance.”
“Having a local view of risks in Africa is critical when it comes to underwriting them,” they continued. “In our experience, many non-African reinsurers are wary about African risks especially when there is minimal underwriting information. Non-African reinsurers will have to adapt to Africa and not the other way round. Non-African reinsurers have to show faith in Africa to be able to grow with Africa.”
“At Neema, we understand the local risks and this is why many reinsurers trust us by giving us binders to write business on their behalf. Our interests are aligned with those of our reinsurance partners.”
Looking ahead to the 2022 renewals in Africa, Neema anticipates that reinsurance capacity for certain classes of business will continue to be limited.
Some global reinsurers are likely to continue in trying to harden the rates with limited effect, while African reinsurers are expected to be more consistent in their approach to Africa.
However, the company also believes that, going forward, factors such as increased vaccination rates, loosening of cross border travel and a general improvement in economic activity will drive the African market towards “brighter days.”
The representatives added that Neema is expecting to retain the majority of its renewals based on our client service, with the goal of achieving at least double-digit growth following the first year of its operations.
Neema has also set itself the objective of reaching $100 million in premium within the next five years.
“At Neema, we pride ourselves in being a company with ambition,” Reinsurance News heard. “Africa being our home, we have at heart to become the Number 1 underwriting management agency in the region. With this in mind, we have set ourselves the objectives of continuing develop new binders within the forthcoming year and achieving a premium income of USD 100 million within the next five years. The team at Neema has the strong belief that achieving the above is within our reach by virtue of our African mindset and values.”
“As a continuation to the above, Neema wants to leave a legacy across communities in Africa,” the company explained. “The willingness to empower and help our people is one of our crucial objectives and a driving force that keeps us going forward. We will also be looking at the emerging Asian countries in order to achieve our USD 100m top-line objective.”