Kenya Re invests Ksh 87.5 million into Africa’s Export Credit Agency - ATI
NAIROBI, 26 August, 2014 – Kenya Re-insurance Corporation (Kenya Re) becomes the most recent shareholder of the African Trade Insurance Agency (ATI). This was revealed at a press conference confirming that Kenya Re paid and subscribed to 10 shares valued at Ksh 87.5 million. By virtue of their respective continental presence and business networks, ATI and Kenya Re will increase the geographical and business penetration in the insurance industry in the field of political & trade credit risks.
This announcement comes in the wake of growing international interest in Africa with initiatives such as the recent US - Africa summit that saw the US commit to $33 billion in investments in Africa. This is expected to result in greater demand for investment and trade insurance as the volumes of projects and transactions are likely to spike. The ATI and Kenya Re announcement is thus a major development for the industry as it will enhance ATI’s capacity in the volume of business it underwrites.
ATI’s CEO, Mr George Otieno, welcomed the news commenting "ATI vision is to transform Africa into a prime trade and investment destination. With partners such as Kenya Re, we are happy that our underwriting capacity has grown, making ATI better armoured to provide investment and trade insurance for the multi-billion projects expected in Africa. In Kenya, for instance, the National Treasury announced an approval for 59 projects that the government plans to execute through public/private partnerships, and we anticipate covering some of these projects." Since ATI became profitable two years ago, new and existing shareholders have indicated their intention to increase their equity.
“Kenya Re is delighted to be in partnership with the African Trade Insurance Agency as this will not only increase our investment and business portfolio but also increase our credibility in East Africa and the entire continent. With the emergence of reinsurance needs around Africa and our eagerness to capitalize on these demands, this partnership will create a platform through which we can strengthen our capacity to reach these untapped and potential markets in Africa,” said Kenya Reinsurance Corporation Managing Director Jadiah Mwarania.
ATI’s shareholding currently totals to Ksh 15.6 billion ($179.5 million), a 1% increase compared to last year. Before Kenya Re, the African Development Bank was the last investor having injected equity worth $15 million in 2013. Other corporate shareholders include the African Reinsurance Corporation, Atradius Group of Ireland, COMESA, PTA Bank, PTA Re (Zep Re) and SACE of Italy.
ATI membership is offered to African and non-African states, private & public corporations, regional economic organizations, international development financial institutions and export credit agencies. African member states or public entities join as class "A" shareholders and collectively, they represent at least 85 percent of ATI's capital stock. Non-African member states and private corporations - classes "B" and "C," respectively while regional economic organizations, international development financial institutions and export credit agencies – subscribe as class "D" shareholders. Kenya Re has joined as a class “A” shareholder.