Insurance and reinsurance in Africa: the AfDB supports ZEP-RE's business expansion plans
At its meeting in Tunis on 18 June 2014, the Board of Directors of the African Development Bank Group (AfDB) approved a request for an additional USD 4 million equity investment in ZEP-RE (PTA Reinsurance Company).
The request was submitted to the AfDB as part of the final phase of ZEP-RE's capital base increase programme. The company intends to use this additional funding to support the next phase of its ambitious strategic business plan.
Under the terms of this plan, ZEP-RE is seeking to expand its reinsurance services in Africa and, more generally, to foster the development of the insurance and reinsurance industry on a continent that has one of the lowest market penetration levels in the world. The AfDB's investment will be used to expand ZEP-RE's capital base from USD 79 million (end 2012) to USD 143 million by the end of 2014.
"The AfDB is committed to supporting ZEP-RE and retaining its shareholding with a view to boosting the company's credit rating. This process also involves the provision of additional equity investment," explains Mouhamadou Niang, Acting Director of AfDB Private Sector Department.
ZEP-RE's vision is to be a world-class leading reinsurer and to provide first-class security and services to its clients. Among its objectives, ZEP-RE seeks to:
- Foster the development of the insurance and reinsurance industry in the COMESA sub-region,
- Promote the growth of national and sub-regional underwriting and retention capacity, and
- Support sub-regional economic development.
ZEP-RE's capital base increase project will make an important contribution to the development of the insurance and reinsurance industry in the region. It will help to boost the company's underwriting capacity and will ensure that it is better placed to meet regional insurance sector needs. This additional capacity will also help to drive down retrocession costs and will improve overall risk coverage.
ZEP-RE is a specialist reinsurance company founded in 1990 to foster the development of the insurance and reinsurance industry in the COMESA sub-region. Its headquarters are based in Nairobi and it has offices in Lusaka, Douala and Khartoum.