NAIROBI, 20 December 2013 – The African Trade Insurance Agency (ATI) – the insurer that specialises in political and trade credit risks in Africa, expects to close 2013 with the highest number of claims recorded in its history. The $6.7 million worth of claims recorded supports transactions including the Westgate shopping mall.
This record is noteworthy because ATI’s entire claims history amounts to $31 thousand since inception. The big jump to $6.7 million, signals that ATI is growing and supporting significant trade and investment transactions in Africa. ATI’s strong capitalisation, reinsurance programme and risk mitigation strategy allows the company to pay claims while protecting its claims ratio.
To place this in further context, the global political risk insurance market has paid out over $2.5 billion in claims since 2007 which is just a fraction of the new business political risk insurers have added to their balance sheets.
“An insurance company that doesn’t pay claims is similar to a bank that doesn’t lend. This is not a winning strategy. We are encouraged by this impressive trend in 2013 and more importantly, by our ability to pay clients’ claims. This means that we are moving toward our objective of becoming the premier political and trade credit risk insurance provider for African transactions,” noted George Otieno, ATI’s CEO.
ATI is well financed with a capital base of approximately $180 million, representing an increase of 15% over 2012. This increase is supported by capital contributions from new shareholders such as the African Development Bank and the Republic of Benin. This solid capital position has contributed to ATI’s continued ‘long term A/Stable’ rating from S&P, renewed in 2013 for the sixth consecutive year and ranking ATI as the number one rated insurer in Africa.
Last year, ATI was admitted into the Berne Union – the leading global organisation for the export credit and investment insurance industry – becoming the second African insurer to join into membership. This marked another milestone indicating ATI’s increasing global reach and influence as an important African insurer for global political and trade credit risks.
In 2012, the Berne Union members collectively insured $1.8 trillion of exports and foreign direct investment – more than 10 percent of international trade. Since the global financial crisis in 2008, Berne Union members have indemnified approximately $22 billion to exporters and investors, protecting them from losses suffered due to buyer defaults in all regions of the world.
