NAIROBI, 19 May, 2009
The African Trade Insurance Agency (ATI), Africa’s only political and credit risk insurer announced record-breaking results during the opening ceremony of its Annual General Meeting at the Inter-Continental Hotel. The Agency’s Chief Executive Officer, Peter Jones announced that ATI had supported a record level of trade and investments worth almost half a billion dollars, of which US$95 million was in support of exports by its African Member States. In addition, the Agency arranged cover for single risk sabotage and terrorism cover worth US$363 million. Overall, the Agency increased its Gross Written Premium by 80% over the previous year to US$1.9 million and increased by 217% its net underwriting income to over US$819,000. In addition, ATI also posted record profits of over US$265,000, more than double its 2007 earnings.
Recognising that ATI’s remarkable results were atypical in the current financial climate, ATI’s Chief commented “We are in a fortunate position to be able to post record results in the midst of the global financial crisis. These results however, speak to Africa’s need for political and credit risk insurance, particularly now when the international markets are contracting.”
ATI’s stellar growth underscored the increased demand expressed by Member states for its insurance products and services. In 2008, ATI supported transactions worth a record US$779 million across all risk sectors in most of its African Member States including, the Democratic Republic of Congo, Kenya, Malawi, Tanzania, Uganda and Zambia.
The Agency also continued to strengthen its financial position. Jones informed the Meeting that ATI members had increased their capital subscriptions, increasing the Agency’s paid-in capital from US$46 million last year to US$86 million this year. The World Bank’s concessionary lending arm, the International Development Association, assists Member countries to meet the financial obligations of their capital subscriptions to ATI. This increased capital will improve the Agency’s ability to satisfy the demand for its products and services.
This capital strengthening enabled Standard and Poor’s, a global credit rating agency, to assign an “A”/Stable rating for both its Insurer Financial Strength and Counterparty credit ratings. This makes ATI the second highest rated institution in Africa after the African Development Bank. This is a critical achievement at a time when banks and investors are becoming increasingly risk adverse and ATI’s insurance products effectively allow African exporters and investments to benefit from its “A” rating, with a consequent reduction in borrowing cots.
In response to the upsurge in business, the Agency announced that it plans to implement a three-year growth strategy that will see it open field offices in a dozen countries by 2011 in line with its planned expansion in membership across Africa. Under this strategy ATI also plans to support up to US$1 billion of annual exports and imports across Africa over the next three years in addition to its investment insurance business. The Agency predicts that the expected US$100 billion shortfall in global trade finance will add to the demand for its products by African exporters and investors.
To sustain current and future business growth, ATI will also incorporate into its business processes, an enterprise wide risk management culture that will help the Agency identify and manage risks. ATI’s existing risk management frameworks and practices were already relatively robust and in keeping with generally accepted practices for an insurer of its size and profile. This change represents an evolution in the market placing ATI at the forefront.
In 2008 the Agency partnered with a record number of industry players, reflecting its core objective to bring to Africa private and public financial institutions. Last year, ATI provided reinsurance to the Multi-Lateral Investment Guarantee Agency (MIGA) a part of the World Bank Group and the Export Finance and Insurance Corporation of Australia. Atradius Re, the second largest reinsurer in the world, renewed its treaty reinsurance supporting the Agency’s export credit insurance business. Various underwriters at Lloyd’s of London also continued their strong support of ATI since its formation by providing it with facultative reinsurance for a number of investment projects in Africa.
The Agency partnered with Africa Re, ZEP Re and underwriters at Lloyd’s of London to provide a local, regional and international solution to the needs of Kenyan insurers to be able to provide insurance to their customers for the political risk, civil disturbance and sabotage & terrorism; and ATI continued to support South Africa’s Industrial Development Corporation’s project lending programme into Sub-Sahara Africa. These partnerships have allowed the Agency to provide solutions that respond to changing market needs and support projects in both the public and private sectors across Africa.
The Republic of Kenya assumed the chair of the General Meeting, the Democratic Republic of Congo, the Vice-Chair, and Burundi the role of secretary to the General Meeting. There was a record attendance by African countries and institutions with Ministers and senior delegations including Africa Re, African Union, Angola, Atradius Re, Benin, Burundi, Democratic Republic of Congo, Egypt, Kenya, Rwanda, SACE SpA, Sudan, Tanzania, Togo, Uganda, Zambia and Zimbabwe.
During the closed session of the Meeting, ATI Board Members and invited delegates passed an important resolution, which will see ATI expand its reach into West Africa and internationally. The Board confirmed the membership of Ghana, its first West African Member country and 14th African Member State; SACE SpA, the Italian insurance and financial services company, being the first OECD export credit agency to join ATI; and the African Reinsurance Corporation, with which the Agency has already established a strong reinsurance partnership.
ATI’s Annual General Meeting will be held in Kinshasa, the Democratic Republic of Congo in May, 2010
Headquartered in Nairobi, Kenya, the African Trade Insurance Agency (ATI) is an African owned International Financial Institution. Founded in 2001 by African States with the financial and technical support of The World Bank Group, ATI provides a range of customised, innovative and competitively priced Credit and Political Risk Insurance Products to support African investments and trade. Since writing its first policy in 2003, ATI has supported US$1.2 billion in trade and investments across Africa.
In 2008, ATI issued insurance policies covering political and commercial risks for transactions worth US$769 million. The Agency also supported exports worth US$95 million from its African Member States. The sectors supported include; telecommunications, manufacturing, agribusiness, education, export, services, hotels, mining and residential housing. Beneficiaries include manufacturers/exporters of goods/services located in Member States, regional and international banks who are providing financial support to regional businesses, investors investing in the region, and the overall business community in ATI’s Member States.
ATI offers Political Risk Insurance for Trade & Investment, Political Violence, Terrorism & Sabotage Cover, Comprehensive Non-payment Cover, Inter & Intra- Regional and Domestic Whole Turnover Credit Insurance, Project Loan Cover, Unfair Calling of Bonds Insurance and Mobile Assets Insurance.
The Agency’s paid in capital is US$86 million, with US$54 million in additional committed capital.
Awarded a Stable Long Term ‘A Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s in 2008, ATI is on track to continue providing effective cover to Africa.
