NAIROBI, Kenya
Africa’s trade credit and investment risk insurer, Africa Trade Insurance Agency today announced a profit of $1.5 million (Ksh128.5 million), an increase of 144% over 2012. The financial results come ahead of ATI’s AGM in Dar es Salaam, Tanzania, on May 28. CEO George Otieno acknowledged the increasingly important role that infrastructure development, especially the energy sector, is playing in the company’s growth. Another important demand area that the company is insuring is financing, which is strongly linked to infrastructure projects.
“We are here to support the priority areas of our member countries. In 2013, this included large projects such as covering fuel importation into Zambia, insuring a bank’s financing in support of Tanzania’s state power utility’s construction plans and support of the Olkaria IV geothermal plant in Kenya. With ambitious objectives to develop infrastructure in most countries, we predict that this priority will continue driving demand for the next decade,” noted Mr Otieno.
ATI secured a €2 million grant (ksh236 million) from the European Investment Bank signed during the EU-Africa Summit in April. The grant will prepare ATI to take a leading role in a future initiative that will see a newly formed body – the African Energy Guarantee Fund – insuring renewable energy projects across Africa. ATI’s Chief Finance Officer Mrs Toavina Ramamonjiarisoa indicated that another important contribution to the strong bottom line is the company’s efforts to diligently manage its finances, which were reflected in results over the past five years.
“This led to a drastic reduction of ATI’s cost ratio – the percentage of the company’s earned premium used to pay all costs – from 268% to just 59%.,” said Mrs Ramamonjiarisoa. Diversification of the investment portfolio is the second tier of ATI’s financial management strategy that was initiated in 2011. As a result, the credit quality of the company’s investment portfolio was much higher than a few years ago – the proportion of assets rated in the AA and AAA ranges increased from 0% to 71% – and, more importantly, the dispersion of counterparty risk substantially improved with more than one hundred counterparties recorded in 2013 compared to only two initially.
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