Africa Trade Insurance to focus on Malawi
Pan-African financial services provider, Africa Trade Insurance (ATI), has said it will focus its business development efforts on countries where it has been historically less active including Malawi.
ATI, a multi-country membership insurance company, has said the emphasis on the countries will justify the investments that these countries have made in the company and give a better spread of risk.
The insurance company has said it is prepared to deal with any challenges “we may encounter on our road towards expansion.”
Membership to ATI is open to all African Union member countries, non-African countries, private corporations and other regional and international institutions.
However, the company is predominantly present in the Common Market for Eastern and Southern Africa (Comesa).
According to ATI, Malawi holds $17 million premium country shares which is about 11 percent of the paid-up premium country members share capital of $153 million.
According to available figures, the rest of the country members’ premium shares are held by Benin, Burundi, Democratic Republic of Congo, Kenya, Madagascar, Rwanda, Tanzania, Uganda and Zambia.
According to the 2013 financial statements, ATI’s exposures—a measure of vulnerability to loss—in Malawi rose by over two fold from $16.1 million in 2012 to $38.4 million in 2013.
Reserve Bank of Malawi (RBM) June 2014 Financial Stability Report shows that the local insurance sector’s performance remained healthy over the review period.
The central bank also noted that the main risks included solvency and liquidity while the sector was also exposed to reinvestment and interest rate risk in view of the fact that most of the insurers’ investments were in the money market.
The Pan-African insurance company has pointed out that in Malawi major risks include exchange transfer, sovereign non-payment, political interference, legal and regulatory risk, risk of doing business, banking sector vulnerability and inability of government to provide stimulus.
According to ATI, in 2013, one of the largest transactions the insurance company supported in Malawi was a $27.5 million contract to a South African fertiliser manufacturer through the government’s Farm Input Loan Programme (Filp).
The insurance company also supported road maintenance and construction of a one-stop border post by Kenya at $ 2.1 million.
