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Chuks Udo Okonta
WAICA Reinsurance Corporation Plc recorded an increase in its Gross Written Premium (GWP) from $153.3 million in 2021 to $214.2 million in 2022, representing 40 per cent growth over the prior year.
This is even as it equally incurred $55.6million claims in 2022 financial year as against $69.9m it did in 2021, translating to 20 per cent drop.
WAICA Re has business interest in 9 African Countries, namely; Zimbabwe, Kenya, Tunisia, Cote D’Ivoire, Sierra Leone, Liberia, The Gambia, Ghana and Nigeria.
Speaking at its 2022 Annual General Meeting (AGM) in Accra, Ghana, over the weekend, the Group Chairman, Kofi Duffuor, disclosed to shareholders that Facultative business amounted to $160.2 million representing 75 per cent of GWP while Treaty brought in $54 million which is 25 per cent of GWP.
On the breakdown of how the premiums were generated, he said, Property generated 50% of the 2022 GWP followed by Casualty with 16 per cent and Engineering 11 per cent even as Oil & Gas brought in 10%, Marine & Aviation 7 per cent, Motor 3 per cent, and Life 3 per cent.
In comparison to 2021 business, he said: “there was a robust growth from 2021 to 2022 for all classes of business except Motor. Property grew by 83%, Life by 56%, Engineering by 51 per cent, Marine & Aviation by 28 per cent, Oil & Gas by 27%, but Motor declined by 11 per cent.”
In relative terms, he stated that, Liberia led Gross Written Premium(GWP) growth momentum by 229 per cent, followed by Kenya 105%, Zimbabwe 94%, Asia and Middle east 65%, Gambia 40%, Tunisia 36%, Nigeria 35%, Ghana 2% and growth decelerate for the rest of Africa by 12 per cent and Sierra Leone by 81 per cent.
“Our dominant market Nigeria contributed 26% of total GWP whilst Ghana brought in 10%. Altogether, Anglophone West Africa, which is our home market, continues to be our backbone by contributing 37% of our total GWP, with Francophone West Africa contributing 8%, Tunisia 11%, whilst Middle East, the rest of Africa and Asia brought in 7%, 6% and 5% respectively. Our subsidiaries in Zimbabwe and Kenya contributed 13% each,” he pointed out.
Retrocession premium, he disclosed, increased by 81% from $24.2 million in 2021 to $43.7 million in 2022 driven mainly by increased business growth and the need to protect the net account. As a result, overall premium retention ratio decreased from 84% in 2021 to 80% in 2022, he said, adding that, after adjusting for unearned premium reserve, net earned premium increased by 8.2% to $158.4 million in 2022 from $146.4 million in 2021.
Saying, even though, there were an increase in business volume and actuarial claims reserve, he added that, net claims incurred declined by 20% to $55.7 million in 2022 from $69.9 million in 2021 as Facultative claims contributed 59% of total claims paid whilst treaty claims was 41%. Consequently, he said, the net incurred loss ratio reduced to 35 per cent in 2022 compared to 48% in 2021.
While Operating expenses increased year on year by 23 per cent from $18.5 million in 2021 to $22.7 million in 2022, the Group displayed a strong underwriting profitability as a result of sound underwriting and risk selection.
As such, technical profit grew from $37.9 million in 2021 to $48.3 million in 2022 representing a 27 per cent growth, while underwriting profit grew from $19.4 million in 2021 to $25.6 million in 2022, a growth rate of 32 per cent, he stressed.
Investment and other income, he noted, witnessed an increase of 16% from $4.6 million in 2021 to $7.2 million in 2022 with net profit before tax rising by 41% from $21.2 million in 2021 to $29.9 million in 2022.
He said, improved premium collection enabled the group to increase cash and investment assets by 28% to $184 million in 2022 from $144.4 million in 2021.
In line with WAICA Re’s dividend policy and in view of the profit performance in 2022, the group declared a dividend of $0.10139 per share amounting to $6million in the year under review as against $5million declared in 2021 financial year end.
Ahead of its capitalisation plan in a move to bring in more investors, he announced the result of the rights issue involving 10,000,000 ordinary shares of par value of $1 and at price of US$ 2.72 per share in a renounceable Rights Issue.
The Rights offer, which, he said, commenced on February 16, 2023, and closed on March 10, 2023, was in a ratio of 1 new share for every 4.9177 existing ordinary shares.
After the rights issue, he disclosed that, the total share capital of the group has increased to US$ 88,438,695 as at 31 March 2023 from US$ 64,876,456 as at 31 December 2022. Also, the unaudited total shareholders fund increased to US$ 161,555,358 as at 31 March 2023 from audited position of US$132,611,560 as at 31 December 2022, he pointed out.
The capitalisation, he said, will strategically position the Corporation to underwrite larger businesses, especially, in the oil and gas sector among others, expansion of ICT infrastructure, undertake some equity investments and to ensure a strong balance sheet that will make it more competitive in the reinsurance market.
The additional capital, he assured, ‘will also augment our working capital, enable us to strengthen our subsidiaries and boost investments income.’
Looking forward, he said, the Group will continue the implement its 3-year business plan from 2022 to 2024, promising that the enabling environment in its operating countries offers great hope to achieving the growth targets set out in the plan.
“We are optimistic of achieving these medium-term goals to position the Group strongly towards becoming one of the largest indigenous reinsurers in the world,” he said.
