Increased Demand for Financing Africa’s Infrastructure Development Credited for Insurer’s 112% Growth in 2012
NAIROBI, 16 May, 2012 -The African Trade Insurance Agency (ATI) released their 2011 results today revealing a five year growth trend. The company posted a 112% increase in their Gross Written Premium which rose to $10 million while their Gross Exposure increased by 55% to $593 million. ATI cites growing infrastructure development needs from countries within the region as a key factor contributing to increased demand for their products as companies and cautious investors seek cover to shield their business interests in Africa.
For the year ending 31 December, 2011 ATI posted results that included an 88% increase in their main business lines of political risk insurance. The four year growth trend has seen premium income in this line of business grow from $1.5 million in 2008 to $8 million in 2011. The company’s other main product, Credit Risk Insurance doubled over 2010 – in this product range, their cover to single buyers/suppliers and lenders saw a particularly steep increase of 682% growth.
“We owe these exceptional results first to our clients, whose loyalty we value tremendously. Second, to our member countries and organisations, who have entrusted us with their invested capital and confidence, and finally, the diligence of our Board and the hard work of our staff has contributed to our success,” noted George Otieno, ATI’s CEO.
The CEO unveiled ATI’s results during the company’s 12th Annual General Assembly meeting (AGM) in which H.E. Kalonzo Musyoka, the Vice President of Kenya opened the session while the Honourable Moses Wetang’ula, E.G.H., M.P., Minister for Trade of Kenya chaired the proceedings of the AGM. Some of the highlights from the meeting included the acceptance of membership applications from Southern Sudan and the African Development Bank, which marks the first in a series of steps towards full membership that both will need to fulfil.
The delegates to the meeting included shareholders in ATI representing organisations and countries from Across Africa, Asia, Europe and North America. The Vice President of Southern Sudan, H.E. Dr. Riek Machar Teny-Dhurgon, who was the Special Guest, led the Southern Sudanese delegation in their bid to join ATI. In his keynote address, he spoke of membership in ATI as a way of attracting critical financing for infrastructure projects in Africa’s newest country.
In terms of impact, ATI, to date, has facilitated an impressive amount of trade and investments into their member countries – amounting to over $7 billion. Specifically the following countries have benefited from ATI’s presence:
|Kenya – ATI has helped attract $3.3 billion to its economy|
|Tanzania - $1.2 billion|
|Zambia - $708 million|
|DR Congo - $414 million|
|Rwanda - $180 million|
|Malawi - $121 million|
|Burundi - $87 million|
|Madagascar - $10 million|
ATI has also seen a dramatic jump of 188% in the volume of business it supports. This represents an increase from $1.4 billion in 2010 to $3.5 billion worth of business transactions supported in 2011. The results support an overall growth trend that has seen the company post consistently positive results averaging 80% growth since 2008.
ATI credits this growth to both external and internal factors. Externally, the growing demand from countries to source financing for capital intensive infrastructure development projects has led to a record number of policies for banks, contractors and manufacturers. This resulted in coverage $900 million worth of transactions for banks in ATI’s member countries and cover for $1.8 billion worth of infrastructure related business in 2011.
Internally, the African multilateral insurer cites as the reasons for their success, a strong risk management strategy, an aggressive marketing campaign and a decentralisation process that has seen ATI open local offices serving six countries (Rwanda/Burundi, Tanzania, Uganda and Zambia/Malawi) in the past four years. These factors have also contributed to ATI’s fourth consecutive reaffirmed ‘A/Long-Term Stable’ rating from Standard & Poor’s, which secures the company’s standing as the second highest rated institution in Africa.
The addition of two key members to ATI’s management team has also contributed to their strong performance in 2011. On the finance side, Toavina Ramamonjarisoa, the former Group Financial Controller of Coface – the world’s third largest credit insurance company – has brought her investment management skills to the role of Chief Financial Officer. To date, she has helped reduce risk exposure and enhance the quality of ATI’s investment portfolio. As a result, ATI now has over 50% of its investments in assets rated AA- or better with returns that helped significantly boost its bottom line in the second half of 2011.
On the business side, Jef Vincent, a veteran of ONDD and Euler Hermes where he was the Regional CEO for Asia, took over the Chief Underwriting Officer (CUO) position in November, 2011. Since joining ATI, he has refocused the underwriting team to one that places the client’s needs and experience at the forefront. Specifically, he has helped to finalise a new bonds product line which is expected to roll out in the second half of this year. Jef has also put in place measures to strengthen ATI’s marketing efforts, and he has fast tracked the implementation of an underwriting system that will increase the efficiency of the underwriting process.
With an eye towards the future, the new CUO has carved out some impressive targets for himself and ATI that, if successful, will see ATI jump to the next level of growth.
“Although our current results are impressive, I believe we are capable of achieving more, particularly on the credit risk insurance side of our business. This is where ATI could truly make a difference to Small and Medium Sized Enterprises (SMEs) and any company or lender that wants to expand their business. This product could be a game changer. It has the potential to reduce the cost of doing business in our member countries through credit services,” noted the CUO, Jef Vincent.
Among the plans for future expansion, ATI intends to push for additional members that could see Southern Sudan, Ethiopia join alongside some West African countries, where the company plans to eventually open a regional office in the next two years to manage the anticipated volumes of new business.