Africa Specialty Risks choose Bermuda for rated reinsurance platform

Africa Specialty Risks, a pan-African focused reinsurance group, has announced that it will launch a licensed and eventually rated reinsurance company and has chosen Bermuda as the location for the operation.

Africa Specialty Risks has been expanding of late, with one notable addition being its launch of a dedicated specialist parametric risk transfer, insurance and reinsurance unit, along with some high-profile hires.

Now, the reinsurer is setting out its stall for growth, by establishing a reinsurance entity in Bermuda, which will help it to increase its capacity base, while also benefiting from Bermuda’s efficient regulatory and tax environment.

Africa Specialty Risks’ (ASR) Bermuda based reinsurance company will offer capacity for a range of business lines, with parametric one of them.

In addition, it will provide reinsurance capacity for Political Risk & Trade Credit, Political Violence & Terrorism, Property, Energy, Liability, and Construction business lines.

The expectation is to get the reinsurer rated, after which this additional reinsurance capacity will be used to strengthen ASR’s MGA capacity, which will support investment and business growth into and across Africa, the company said.

Mikir Shah, CEO at Africa Specialty Risks, said, “Launching our reinsurer in Bermuda is another big step for Africa Specialty Risks as we continue to build a comprehensive offering of specialty reinsurance products and services for the African markets and beyond.

“The island is an important centre of finance and increases our footprint. The reinsurer will work closely with our group companies in London and Mauritius.”

As ASR operates an MGA model, working with high-quality capacity providers, it seems having its own reinsurer will augment this, but perhaps also provide an opportunity to take greater ownership of some of its capacity, enhancing its own earnings as a result.

It could also provide opportunities to bring in third-party reinsurance capital in a managed way further down the line, with the Bermuda base opening the potential to add companion capital from investors using structures like sidecars, if the company chose.

This is positive for Africa’s reinsurance market, as having a specialist dedicated to it can only help to further institutionalise the use of reinsurance capital in that emerging and growing marketplace.