- Afrexim’s subsidiary, AFREXInsure, will manage trade and commerce-related risks in Africa.
- AFREXInsure will leverage its risk expertise using its continent-wide presence.
- Cargo handling, construction, operations and energy sectors are on target.
The African Export-Import Bank has launched its wholly owned insurance management services subsidiary, AFREXInsure.
The new subsidiary aims to offer a single point of entry for all speciality insurance requirements to help manage associated risks for African trade and commerce. The insurance arm of the bank will offer quality, best-in-breed specialty insurance that are tailor-made for Africa.
With credible knowledge of Africa, AFREXInsure will leverage on its risk expertise using its continent-wide presence and deep understanding of the African market to provide solutions around cargo handling, construction, operations and energy – sectors critical for the growth and establishment of trade and investment intercontinentally.
AFREXInsure targets specialty risks
Speaking during the launch, which took place on the sidelines of Afreximbank’s 30th Anniversary Annual Meetings, Kanayo Awani, Executive Vice President, Intra-African Trade Bank, said that AFREXInsure was established to facilitate the insurance of specialty risks in order to support businesses in Afreximbank member countries.
This, she added, would mitigate the problem of Africa having to rely on external partners to architect the continent’s economic resilience and development.
“By reducing the risk of transactions or investments, insurance can help drive forward business strategy for those engaged in intra-African trade and enable global partners to further their commercial interests and ambitions in Africa,” said Awani.
Insurance penetration is relatively low in Africa compared to other regions. Despite its importance for economic development, the majority of African countries lack access to insurance products.
A report by the African Insurance Organisation indicates that Africa’s aggregate insurance penetration rate in 2019 was only 2.78 percent, compared to the global average insurance penetration rate of 7.23 percent.
Africa’s insurance premium growth low
Additionally, the overall premium growth in US dollar terms in Africa was slightly negative at minus 0.3 percent. This is well below global premium growth of 3 percent and the emerging market growth of 4.9 percent.
In order to tackle insurance penetration in Africa and the Caribbean, AFREXInsure is seeing an opportunity in this area. Additionally, AFREXInsure will aid in keeping insurance premiums in Africa and helping the continent recoup its investments. The initiative will boost commerce and economic growth, promoting wealth throughout Africa.
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade.
For 30 years, the Bank has been deploying innovative structures to deliver financing to transform the structure of Africa’s trade. The lender has been accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa.
Effectively participate in AfCFTA
A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System. The African Union adopted the platform as the payment and settlement system underpinning the continental trade deal.
The bank is setting up a $10 billion adjustment fund to enable countries tap into the AfCFTA.
In 2022, Afreximbank’s total assets and guarantees stood at over $31 billion, and its shareholder funds amounted to $5.2 billion.
The Bank disbursed more than $86 billion between 2016 and 2022. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB)
