Renee Bonorchis
ONE Re, the first reinsurer approved under Britain’s “twin peaks” system of financial regulation, was seeking clients across 38 African countries in the next year as growth outpaces developed regions.
One Re, started by Johannesburg-born brothers Andrew and Robert Lewis in 2012, already has clients signed up in Mozambique, Angola and Lesotho. Chief executive Andrew Lewis created insurer Global Alliance in 2001 before selling its operations to various buyers including Barclays Africa Group in 2011.
“In sub-Saharan Africa there are 38 countries we have identified and we are going in looking for local insurers that we will insure,” London-based Andrew Lewis said in an interview in Johannesburg yesterday. Lloyd’s of London, Sirius International Insurance Group and Canopius Reinsurance were supporting One Re, he said.
The UK reinsurer, which will partner with just one insurer in each country, was funded by the Lewis brothers who each contributed $25 million (R274m). In five years it would probably seek to raise about $100m, according to Andrew.
Global insurance companies are evaluating markets in Africa where millions of people are earning enough to afford business cover and protection for the first time. Some of the firms are gaining insights into the continent by working with One Re.
“The appetite is there for Africa,” Lewis said. “We are a gateway to Africa for the international community. To deal with any risks we are diversifying risk as much as possible, so there is the 38 countries.”
Insurance penetration for Africa, measured as a percentage of premiums to gross domestic product, was 3.5 percent, according to a PricewaterhouseCoopers report released in South Africa in October.
That is more than the emerging markets’ average of 2.7 percent and lower than the average for advanced markets of 8.3 percent.
Revised regulations in the UK have divided responsibilities between the Financial Conduct Authority and the Prudential Regulation Authority, an arm of the Bank of England designed to supervise capital and liquidity requirements at banks, insurers and investment firms.
To boost its operations One Re had also set up a training centre in South Africa, according to Lewis. In-country training, skills development and knowledge transfer would support the growth of Africa’s reinsurance markets, he said. – Bloomberg