Lawrence Nazare, Group CEO of Continental Reinsurance
Reinsurance has played a crucial role in the growth and development of the insurance industry. Over the years, the reinsurance sector in Africa has witnessed significant transformations.
Lawrence Nazare, the Group CEO of Continental Reinsurance, shares his insights and experiences regarding the evolution of the reinsurance sector and its role within the Organisation of Eastern and Southern Africa Insurers (OESAI).
From Global Dominance to National Empowerment
When Lawrence Nazare began his career in the reinsurance sector over 33 years ago, the industry landscape was vastly different. At that time, the market in Africa was mostly dominated by global reinsurers such as Munich Re, Swiss Re, and others. National reinsurance companies, including Egypt Re, Zim Re, Nigeria Re, Ghana Re, Tunis Re, CCR, and Kenya Re, played a significant role in complementing the global reinsurers’ presence.
However, as the years progressed, there was a shift in focus. Structural adjustment programs led to the privatization or closure of national insurance companies. The unintended consequences of this approach were eventually recognized, and new national reinsurance companies emerged. The likes of SCG in Gabon, Namibia National Reinsurance Company, Tanzania Re, Uganda Re, and partially national outfits in Zambia contributed to higher premium retentions and the overall development of reinsurance and insurance markets.
The Value of a Crowded Market
While some argue that the reinsurance sector has become crowded, Lawrence Nazare believes that as long as these companies contribute to higher retention and market development, their presence is valuable. Drawing a parallel to Switzerland’s numerous licensed insurance companies, he emphasizes that the number of reinsurance companies in Africa is not a concern. The focus should be on ensuring these companies add value to the objective of developing the insurance market rather than being purely transactional.
Continental Reinsurance’s Resilience and Market Development
Continental Reinsurance stands as one of the few surviving private reinsurance companies. While some Nigerian companies have collapsed over the years, Continental Re has endured by continually improving its quality and business practices. Lawrence Nazare commends the overall improvement in governance, balance sheet sizes, and business practices among new reinsurance companies. Their aspirations for international ratings, focus on skill development and commitment to robust practices bode well for the future growth of insurance markets in Africa.
The Role of OESAI in Building Consolidated Markets
Lawrence Nazare emphasizes the importance of aggregating volumes across regions or the continent for the viability of the insurance and reinsurance markets. Trade associations like OESAI provide platforms for collaboration, enabling discussions on cross-border trade and the creation of frameworks for harmonized markets. Harmonization efforts should encompass regulations, capacity sharing, and the exchange of ideas for further market development.
Successful examples of harmonization can be seen in the CIMA zone of francophone Western Central Africa, where 14 insurance markets have built a consolidated market through a harmonized regulatory framework.
As the reinsurance sector in Africa has evolved, it has witnessed a shift from global dominance to the empowerment of national, regional and private, local, reinsurance companies. The emergence of new players and the overall growth of the market have contributed to higher premium retentions and the development of insurance markets across the continent.
Trade associations like OESAI play a vital role in fostering collaboration and harmonization efforts, creating the foundation for more viable and consolidated regional markets.
The insights and experiences shared by Lawrence Nazare shed light on the progress made and the potential for further growth and development in the reinsurance sector in Africa.