Cynthia Ezekwe
FBS Reinsurance Nigeria Limited (FBS Re) has disclosed plans to reduce Africa’s reliance on foreign reinsurers, which has led to significant capital flight and volatility in capacity availability.
The reinsurance underwriting firm noted in a statement that African insurance markets experienced foreign reinsurers withdrawing their capacities, especially, during any foreign currency liquidity crisis, which disrupts business planning, eroding stable reinsurance capacity, and increasing costs.
“These foreign companies’ impromptu exits usually disrupt corporate planning efforts, erode much-needed stable reinsurance capacity, and increase the cost of business. Thus, the markets face capacity availability volatility to provide for growing industrial, energy, aviation, and marine risks,” the company noted.
FBS Re stressed that over the years Nigerian and other African insurance industry players have been relying on foreign reinsurers, leading to the undesirable consequence of scarce foreign currencies being exported to pay for reinsurance services abroad.
As the insurance industry’s gross written premium in Nigeria surges and risks become more complex, the demand for reinsurance services increases significantly, creating a significant market opportunity.
With FBS Re’s gross written premium in 2023 standing at N31.44 billion, the reinsurer, backed by institutional shareholders like Leadway Assurance, Custodian and Allied Group, Standard Insurance Consultants, Scib Nigeria Limited, and YOA Re Brokers is poised to save Africa from challenges faced with the recurring exit of foreign reinsurers.
The company reiterated its commitment to reduce the capacity gaps, conserve the economy’s scarce foreign exchange, and be a significant player in international reinsurance.
