Africa Specialty Risks wants to capitalise on banner year

Africa Specialty Risks (ASR) is hungry for additional capacity as it continues to expand its reinsurance presence in Africa and the Middle East. 

The specialty reinsurer, which was established to bridge the protection gap in the African continent, has had a banner year so far in 2024, having already written more gross written premium than 2023’s $140 million GWP. 

ASR aims to write $250 million this year, said Brian McGregor, director of underwriting and head of property.  

“We have expanded our suite of binders or cover providers,” he said. “We now have about seven different binders including Africa Re, SCR Morocco, Atrium and Arch across nine different lines of business,” he said. 

“A lot more of the other capacity providers are participating on the deals we are writing.”

The growth came about partly because ASR also started its own Lloyd’s syndicate this year, where “capacity has been flying off the shelf”, he said in an interview with Monte Carlo Today. 

Syndicate 2454 is the only Africa-focused syndicate in the market and was an immediate success, McGregor said. 

“It has such amazing quality paper and has such a good reputation that that capacity is flying off the shelf and it gives a halo effect across our whole business,” he said. “Because we now have a Lloyd’s syndicate, we are seen in a completely different light, and a lot more of the other capacity providers are participating on the deals we are writing. 

“That is our model: to feed all our capacity providers, because our mission is to bring capacity to Africa.”  

Now the company is seeking to add more capacity as demand in the continent remains strong, McGregor said.

“We’re still looking for more,” he said. “We are working with Lloyd’s to set up an Africa consortium so we will have additional capacity, which we will lead. We hope that it will be finalised this year.” 

The consortium is likely to have three members, each putting in $5 million. 

“This will provide more capacity, will give us more influence over terms and help us control more of the deals that we see,” he said. “We are fast becoming a one-stop shop for brokers.” 

More of Africa

McGregor said ASR was looking to write more in Kenya and Egypt, and planning to write more political risk and trade credit insurance in East Africa. 

“We have realised that insurance penetration is very low—under 2 percent of gross domestic product. The common perception is that that is a demand side weakness but the more we bring capacity into Africa, the more we realise there is also a supply side constraint,” he explained.  

McGregor said demand was not limited to property and casualty; it would also look at political risk and trade credit as the African Free Trade Agreement takes hold. 

As intracontinental trade expands, McGregor said the trading partners needed credit risk cover until they built up trust with their counterparties.

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