Annual Report & Accounts 2019 Contents • Established in1976 • 41 African Member States ANNUAL REPORT & ACCOUNTS 2019 1 Annual Report & Accounts 2019 Annual Report & Accounts 2019 Contents Contents About Us The Corporation is the best rated pan-African reinsurer. The African Reinsurance Corporation (Africa Re) was established as a pan-African • A.M. Best Company: A (Excellent / Stable Outlook) since 2016 (A – since 2002) intergovernmental reinsurance group on 24 February 1976 by 36 member States of the • Standard & Poor’s: A – (Strong / Stable Outlook) since 2009. Organization of African Unity (now African Union) and the African Development Bank Group (AfDB). Africa Re manages the following continental and national Insurance Pools: Mission • AAIP: African Aviation Insurance Pool, which started in 1983 is promoted by the African • To foster the development of the insurance and reinsurance industry in Africa; Insurance Organization (AIO) for aviation business. • To promote the growth of national, regional and sub-regional underwriting and retention • AOEIP: African Oil & Energy Insurance Pool, which started in 1989 is promoted by the African capacities; Insurance Organization (AIO) for oil & energy business. • To support African economic development. • EAIPN: Energy & Allied Insurance Pool of Nigeria, which started in 2014 is promoted by the Nigerian Insurers Association (NIA) for oil & energy business. Value Proposition We also contribute to the wellbeing of our societies through the Africa Re Foundation registered • We deploy our strengths and leverage our proximities for endless possibilities and client in Mauritius. Up to two percent (2%) of our annual Net Profit is committed to Corporate Social protection. Responsibility (CSR) activities. The areas of focus of the Africa Re Foundation are: • We Offer financial protection through reinsurance covers to life and non-life insurers in Africa • Insurance education; and other selected markets in the Middle East, Asia and South America. • Industry development; • Disaster relief; Diversified Shareholding • Technology development; • Community development; and • 41 African States – 34.50%; • Risk prevention, awareness & research. • 114 Insurance and Reinsurance Companies – 34.00%; • African Development Bank – 8.40%; • Fairfax Financial Holdings – 7.35%; Recent Recognition & Awards in 2019 • AXA Africa Holdings – 7.35%; • Allianz SE – 8.40%. Name of Award Year Institution Inclusion in the Top 40 Global Reinsurance Group 1 2019 Standard and Poor’s by Standard and Poor’s in 2019 With a gross written premium of US$ 844.786 million in 2019, Africa Re is the leading and 2012 Best Regional Retakaful Company (7 times since largest pan-African reinsurer in Africa and the Middle East (by net reinsurance written premium). 2 to The International Retakaful Summit 2012) by the International Retakaful Summit 2019 Africa Re is ranked 37th by S&P in the Top 40 Global Reinsurance Groups by net reinsurance Outstanding Insurance Development Promoter National Association of Insurance and 3 2019 premiums written in 2018 and ranked 42nd by AM Best in the Top 50 World’s Largest in Nigeria Pension Correspondents (NAIPCO) Reinsurance Groups by unaffiliated gross premium written in 2018. 4 Inclusion in the Top 50 Global Reinsurance Group 2017 AM Best Our portfolio is about 95% Property & Casualty with the remainder covering Life & Health. Our Global M & A Awards (Acquisition 5 Reinsurance Firm of the Year in Africa 2015 risk solutions are categorized into Fire & Engineering, Accident & Motor, Oil & Energy, Marine & International) in London , UK Aviation, Life & Health and Miscellaneous. Award for Excellence in Case Management 6 2015 BPM & WfMC, in Arlington, Virginia, USA The Corporation is led and managed by Africans and has 254 employees from 27 African (Information Technologies) nationalities. Capital Finance International, 7 Best Reinsurance Company in Africa 2014 United Kingdom Africa Re operates from 7 business locations serving Africa, parts of the Middle East, Asia and Latin America. The network of offices comprises: 8 Best Reinsurance Organization in Africa 2012 African Insurance Organization (AIO) • Subsidiaries (2): Africa Re (South Africa) Ltd. & Africa Retakaful Company (Egypt) • Regional Offices (6): Nigeria, Morocco, Côte d’Ivoire, Egypt, Mauritius & Kenya • Contact Offices (1): Ethiopia • Underwriting Representative Offices (1): Uganda 2 3 Annual Report & Accounts 2019 Annual Report & Accounts 2019 Contents Contents Financial highlights In US$ ‘000 2019 2018 2017 2016 2015 Results Written Premium 844,786 797,415 746,829 642,024 689,291 TABLE OF CONTENTS Retained Premium 681,647 681,334 625,650 556,995 593,473 3 LETTER TO THE GENERAL ASSEMBLY 37 Enterprise Risk Management (ERM) Earned Premium (Net) 673,340 673,554 606,896 567,532 590,821 Net Profit 99,904 31,269 87,982 100,202 103,645 4 BOARD OF DIRECTORS 40 Corporate Governance Financial position 10 EXECUTIVE MANAGEMENT 44 Compliance Shareholders’ Equity 975,198 917,047 902,039 812,311 780,071 11 CENTRAL DIRECTORS 45 Corporate Social Responsibility Total Assets 1,770,980 1,648,066 1,628,545 1,447,299 1,374,464 14 REGIONAL DIRECTORS 46 Human Resources and Compensation 17 CHAIRMAN’S STATEMENT 49 MANAGEMENT RESPONSIBILITY Results 2015 - 2019 Financial position 2015 - 2019 20 MANAGEMENT REPORT 50 INDEPENDENT AUDITOR REPORT (in million US$) (in million US$) 20 Economic and Trade Environment 55 FINANCIAL STATEMENTS 1,771 1000 1800 25 Technical Operations 56 Consolidated Statement 1,648 1,629 845 26 Premium Income of Financial Position 1,447 797 1500 1,374 800 747 27 Legal (compulsory) Cessions 56 Consolidated Statement of Profit or 689 682 681 Loss and Other Comprehensive Income 642 28 Geographical Distribution 626 1200 593 57 Consolidated Statement of 600 557 975 29 Sectoral Distribution 917 902 Changes in Equity 900 812 30 Technical Expenses 780 58 Consolidated Statement of Cash Flows 400 59 Notes to the Financial Statements 600 31 Investment Income 102 Appendix: Consolidated Statement of 200 31 Portfolio Performance 300 Profit or Loss by Class of Business 104 100 100 88 32 Asset Composition 31 0 0 32 Long Term Investments 33 Equities 2019 2018 2017 2016 2015 2019 2018 2017 2016 2015 33 Bonds and other Fixed Income Written premium Shareholders’ funds 34 Cash & Cash Instruments Retained premium Total assets 34 Other Operating Income Net profit 34 Results of the 2019 Financial Year 35 Appropriation of Results Ratings Proposed dividend per share 35 Capital Management 36 Financial Strength & Capital Adequacy A.M. Best A.M.Best A (Excellent/Stable Outlook) US$8.8 Standard S&P 2018 Dividend: US$ 8.0 & Poor’s A- (Strong/Stable Outlook) 4 1 Annual Report & Accounts 2019 Annual Report & Accounts 2019 African Reinsurance Corporation General Assembly June 2020 Honourable Representatives, In accordance with the provisions of Articles 14 and 37 of the Agreement Establishing the African Reinsurance Corporation and Article 8 of the General Regulations of the Corporation, I have the honour, on behalf of the Board of Directors, to submit to you the Annual Report and Audited Accounts of the Corporation for the period 1 January to 31 December 2019. Please accept, Honourable Representatives, the assurance of my highest consideration. African Reinsurance Corporation Annual Report & Financial Statements HASSAN BOUBRIK 31 December 2019 Chairman of the Board of Directors and General Assembly 2 3 Annual Report & Accounts 2019 Annual Report & Accounts 2019 Board of Directors Board of Directors BOARD OF DIRECTORS Mr Hassan BOUBRIK Mr Kamel MARAMI Chairman Director Chairman of the Nomination and Governance Committee Member of the Nomination and Governance Committee Member of the Human Resources and Remuneration Committee Nationality: Mr BOUBRIK is currently the Chairman of the Supervisory Moroccan Authority of Insurance and Social Security in Morocco. He Nationality: Mr MARAMI is currently the Director of Insurance and holds degrees in Finance and Actuarial Science and is in Algerian member of the Insurance Supervisory Commission, Constituency: charge of insurance supervision. Ministry of Finance, Algeria. Morocco: state and companies Constituency: He previously served as Chief Executive Officer of a major Algeria: state and 4 companies He is a professional insurer and holds degrees in Current Term ends in: finance conglomerate in Morocco and has held many Economics and Finance. Mr MARAMI equally has a 2020 board positions. Current Term ends in: Postgraduate degree in insurance. 2021 Mr Aguinaldo JAIME Vice Chairman Chairman of the Human Resources and Remuneration Committee Member of the Nomination and Governance Committee Mr Jean CLOUTIER Nationality: Mr JAIME has occupied the following positions in Angola: Director Angolan President of the Angolan insurance regulatory authority Chairman of the Underwriting, Risk Management and Information (ARSEG), Deputy Prime Minister, Governor of the Central Technology Governance Committee Constituency: Bank, Minister of Finance, President of the Angolan States of East and Southern Agency for Private Investment (ANIP), First President Nationality: He is the current Chairman of Fairfax International, Africa and Sudan of the Angolan Investment Bank – Banco Angolano de Canadian Executive Committee Member of Fairfax Financial Investimento (BAI), Director of the Foreign Investment Current Term ends in: Holdings Limited and Vice President of International Board (FIB), and Director of Planning, Studies and Constituency: 2020 Operations. Mr