Africa Re’s profit rises 74% on market success

African Reinsurance Corporation (‘Africa Re’) has recorded $ 131.43 million profit at the of third quarter 2024, translating to an improvement of 74.19 percent from $ 75.45 million achieved in the same period of 2023.

The African reinsurance giant, during the same period, recorded a gross written premium income of $ 879.05 million, translating to 8.99 percent growth from the $ 806.55 million reported for the same period of 2023.

This was mainly due to successful marketing efforts, positive pricing momentum, and moderate economic growth witnessed by most countries in Africa, its core markets, despite continued challenges posed by the ongoing geopolitical tensions, extreme weather conditions, fiscal policy tightening, currency depreciation against the US Dollar and inflationary pressures, the company said.

Corneille Karekezi, group managing director/CEO of Africa Re, while commenting on the performance at the end of September 2024 stated that, “Africa Re continues to demonstrate a strong and resilient business model which is able to capture the full benefits of a conducive environment characterized by a continuous positive adjustment or of global reinsurance market prices and the strengthening of returns in the global financial markets.”

At the end of the third quarter of 2024, Africa Re recorded a gross incurred claims of $ 436.78 million, compared to $ 404.40 million for the same period in 2023. The negative variance of 8.01 percent is attributable to increasing claims reported and incurred under the period across some of its business units and lines.

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In the same period, the retrocessionaires’ share of incurred claims increased from $ 27.60 million in Q3 2023 to $ 45.49 million in Q3 2024. The combination of these resulted in a net incurred claims of $ 391.29 million at the end of the 3rd Quarter of 2024 from $ 376.79 million recorded in the same period of 2023.

Net commissions and charges amounted to $ 191.71 million as against $ 169.36 million recorded in the same period in 2023. This increase of 13.20 percent in the net acquisition cost originated from an increase in the written premium volume.

The net combined ratio at the end of the third quarter of 2024 stood at 88.74 percent, down from 93.66 percent recorded in the same period of 2023.

As a result of the above, the net underwriting result as at Q3 2024, under IFRS 4 accounting standard, closed at $ 79.52 million, an improvement of 100.82 percent compared to the net underwriting result of $ 39.60 million reported at the end of September 2023.

Investment & other income for the reported period is $ 71.74 million, translating to an increase of 59.40 percent above the US$ 45.01 million recorded in Q3 2023. The positive performance was driven by higher interest income from fixed-income instruments.

Thanks to the above excellent underwriting and investment performances, the overall net profit stood at $131.43 million, translating to an improvement of 74.19 percent compared to the profit of $ 75.45 million achieved in the same period of 2023.