Africa Re & French insurance giant Axa sign deal

Africa Re shareholding comprises 41 African states (34%), more than 100 African insurance and reinsurance companies (33%), the African Development Bank (8%), IRB-Brasil Re—a leading Brazilian reinsurer (8%) and development finance institutions (DFIs)—namely, the International Finance Corporation of the World Bank, DEG (a branch of the KfW bank) and Proparco (a branch of the Agence Française de Développement). Axa has acquired part of the shares put back by some DFIs that invested in Africa Re capital in 2004 and are exiting in accordance with a put option agreement allowing them to exit after the elapse of their investment horizon. These DFIs normally invest in companies to support their development and, as they are indeed investment funds, have to exit after a certain time, generally between five and 10 years. Africa Re is the largest reinsurer in Africa, operating across the continent. It was founded in 1976 by the member states of the African Union and the African Development Bank. Africa Re is a growing and profitable company, with gross written premiums of €505m and net income of €64m in 2013. Africa Re has strong reinsurance market shares across the continent, notably in countries identified as key priorities for Axa, such as Nigeria and Egypt.hideIn December, Axa completed the acquisition of 100% of Assur Africa Holdings, which holds a 77% stake in the composite Nigerian insurance company Mansard Insurance plc, for a total consideration of €198m. At the time, Axa said: “This transaction would allow Axa to increase its exposure to the fast-growing reinsurance and insurance markets in Africa, in line with its ambition.” Commenting on the new development, Corneille Karekezi, Africa Re Group Managing Director and Chief Executive Officer, said: “The exit from our shareholding by some DFIs and the coming in of Axa is a natural development, intended and well planned by both parties. “From a pure multilateral institution in the 1970s and 1980s, Africa Re gradually expanded its shareholding base to integrate African insurance and reinsurance companies in the 1990s and DFIs in 2000s. After 2011 came the time of non-African global insurers and reinsurers with the entry of IRB-Brasil Re. This latest move aims at achieving a strong strategic and business partnership with industry players.” Furthermore, talking about what Axa will bring to Africa Re, Mr Karekezi stated: “With Axa on board, Africa Re will gain a lot. Indeed, as our customers’ demand of tailored products with international standards is fast growing, we need to keep our market and competitive positions in Africa and meet that demand. Africa Re will tap into Axa’s immense expertise and research development, refined global market knowledge and cutting edge corporate solutions in insurance and risk consulting.” Moreover, Axa expects to benefit from the extensive knowledge of local markets and expertise of Africa Re’s management team. Denis Duverne, Deputy Chief Executive Officer of Axa, said: “This transaction is another step in our African strategy and follows on from our recent acquisition of Mansard in Nigeria and our partnership with the World Bank Group’s International Finance Corporation. “It allows us to increase our pan-African exposure and to benefit from the knowledge of an experienced and successful partner,” he said. “At the same time, this new step confirms our commitment to the African continent, where we believe insurance has a crucial role to play in promoting economic development, due to its contribution to improving risk management, protection and prevention. Thus, we are delighted to bring our strong technical knowhow and expertise to support Africa Re’s ambitions.”

Africa Re & French insurance giant Axa sign deal

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