NAIROBI, 19 May 2014 –George Otieno, Chief Executive Officer, Toavina Ramamonjiarisoa, Chief Financial Officer and Jef Vincent, Chief Underwriting Officer of the African Trade Insurance Agency (ATI) gave a preview of the company’s 2013 results in Nairobi ahead of ATI’s Annual General Meeting, scheduled to take place in Dar es Salaam, Tanzania and to be hosted by H.E. President Jakaya Kikwete.
At the press event, Mr Otieno acknowledged the increasingly important role that infrastructure development, which includes the energy sector, is playing in the company’s growth. In 2013, ATI posted a record profit of $1.5 million (Ksh128.5 million) – an increase of 144% over the profit made in 2012. Another important demand area that the company is insuring is financing, which is strongly linked to infrastructure projects.
“We are here to support the priority areas of our member countries. In 2013, this included large projects such as covering fuel importation into Zambia, insuring a bank’s financing in support of Tanzania’s state power utility’s construction plans and support of the Olkaria IV geothermal plant in Kenya. With ambitious objectives to develop infrastructure in most countries, we predict that this priority will continue driving demand for the next decade,” noted Mr Otieno.
Tied to this demand for support of infrastructure development by ATI’s member countries, the company’s growing international reputation in underwriting energy sector deals led to them securing a €2 million grant (ksh236 million) from the European Investment Bank signed during the EU-Africa Summit in April. The grant will prepare ATI to take a leading role in a future initiative that will see a newly formed body – the African Energy Guarantee Fund – insure renewable energy projects across Africa.
Presenting on ATI’s financial management strategy, Mrs Ramamonjiarisoa indicated that another important contribution to the strong bottom line is the company’s efforts to diligently manage its finances, which were reflected in results over the past five years. This led to a drastic reduction of ATI’s cost ratio – the percentage of the company’s earned premium used to pay all costs – from 268% to just 59%.
Diversification of the investment portfolio is the second tier of ATI’s financial management strategy that was initiated in 2011. As a result, the credit quality of the company’s investment portfolio was much higher than a few years ago – the proportion of assets rated in the AA and AAA ranges increased from 0% to 71% – and, more importantly, the dispersion of counterparty risk substantially improved with more than one hundred counterparties recorded in 2013 compared to only two initially.
Other key achievements presented included:
Volume of Business Supported
$13 billion – Ksh1 trillion (+24%)
Insured Trade & Investments (Gross Exposure)
$872 million – Ksh75 billion (+23%)
Shareholders’ Capital
$178 million – Ksh15 billion (+14%)
Net Earned Premium
$6 million – Ksh514 million (+55%)
The company’s 2013 annual accounts will be formally unveiled and approved during its 14th Annual General Meeting on 28th May in Dar es Salaam, Tanzania. The Honourable Saada Mkuya Salum (MP), Minister of Finance, will chair the meeting.
