Higher claims hit Africa Re’s Q1 profits but GWP grows steadily

African Reinsurance Corporation enjoyed steady growth in the first quarter of 2017 but its profits were hit by large claims in South Africa, the Middle East and Mauritius.

The reinsurer’s gross written premium increased to $167.13 million in the first quarter of 2017 compared with $162.28 million in 2016. It said performance was mainly driven by new businesses written in West Africa as well as the favourable impact on the business written in rand. Conversely to the other African currencies, the rand appreciated against the US dollar during the first quarter of 2017.

However, the large claims recorded in South Africa as well as in the Middle East and Mauritius translated in a decline of Africa Re's underwriting profit to $7.093 million at the end of March 2017 from $11.82 million in March 2016.

The company’s investment income during the quarter grew by 13.36 percent to $13.80 million. This performance was mainly due to the fixed income and equity investment that posted returns above their respective targets, the company said.

Corneille Karekezi, Africa Re's Group CEO, said the first quarter performance is in line with the expectations and believes that this momentum will continue as long as the company's claims experience remains below the 10-year average and disciplined underwriting approach is upheld.

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