New sub-regional reinsurance company seeks shareholders

Shares of a new sub-regional reinsurance company, WAICA Reinsurance Corporation, formed by the West African Insurance Companies Association (WAICA), are up for sale at one dollar per share. A delegation of the Corporation was recently in The Gambia,  as part of the ‘equity road show’ of the institution to its member countries, to have meetings with potential investors,  including individuals, companies and governments, to raise the initial capital of an institution conceptualised thirty years ago by the founding fathers of WAICA. In The Gambia, the delegation held meetings with top officials of the Central Bank of The Gambia, the Gambia Chamber of Commerce and Industry as well as officials of the insurance industry. During the meeting with insurance officials, attended by managing directors and other senior managers of all the insurance companies in the country on Thursday at the Kairaba Beach Hotel, the chief executive officer of WAICA Re, Abiola Ekundayo, said the reinsurance corporation will provide the much-needed reinsurance capacity for the sub-region. Mr Ekundayo said the objective of the ‘equity road show’ was to raise the initial capital to kick-start the operation of the corporation.  “Our authorised capital is US$100 million but we need to have US$25 million to start operations as according to the law of Sierra Leone, where the head office is located, you must pay 25% of the authorised capital before you start operations; that is why we are embarking on this activity to raise funds from individuals, institutions as well as governments of member countries of WAICA.” The shares of the association are up for sale until 29 July 2011.  It is expected that within this period the association will be able to raise the initial amount needed to commence operations. WAICA Re, recently launched by the President of Sierra Leone, Ernest Bai Koroma, is out to fill the gap of reinsurance in West Africa so that reasonable proportions of reinsurance premiums that have been flying out of the sub-region to reinsurance companies in the West will be retained for investment.  WAICA Re will provide its clients with comprehensive insurance, reinsurance, financial and business services of the highest quality and value. Mr Ekundayo explained that there are many insurance companies in the sub-region but there are inadequate reinsurance companies to carry the risks that these insurance companies carry. He said the sub-region needs a reinsurance company that has the capacity and ability to carry the risks that the insurance companies carry. “That is why WAICA Re was established,” he said. As the CEO of WAICA Re, Mr Ekundayo said his vision is to build formidable sub-regional reinsurance company of international standard that can favourably compete with other notable global reinsurers. It is estimated that the reinsurance premiums paid by West Africa insurance companies to overseas reinsurance companies amounted to US$65 million in 2009. The future is bright for WAICA Re as the development of the oil and gas sectors in Ghana and Sierra Leone provides tremendous growth opportunities. For his part, William B. Coker, secretary general of WAICA, formed by the five English-speaking countries of West Africa in 1973, said the sub-regional reinsurance company is enjoying diplomatic status in Sierra Leone, where it is hosted.  “Enjoying diplomatic status means WAICA Re is not going to pay tax and you all know if an institution doesn’t pay tax it has higher profit and it’s from this profit that dividends of shareholders are paid,” he said. “The higher the profit, the higher the dividends and obviously the institution will make higher profit because it will not be paying tax.” Mr Coker told insurance officials that should any individual or institution invest in WAICA Re, the commercial arm of WAICA, “you will not regret it as you will make profit more than investing in any ordinary business ventures”. Dawda Sarge, president of the Insurance Association of The Gambia, who is also the managing director of Prime Insurance Company Limited, said the occasion was very “unique and auspicious”. He called on the insurance practitioners and all other potential investors to respond appropriately, by buying the shares of WAICA Re, to make the venture a successful one.  “Our commitment must be backed with some action to make it move,” he said. Senor Thomas, managing director of International Insurance Company Gambia Ltd, also urged her colleagues to support WAICA Re, saying “it is our own organization” as it’s a worthwhile venture.  “Honestly I think we need to support the institution as we are all going to benefit from it,” said Madam Thomas, who is a member in the ten-member board of WAICA Re. Pa Alieu Sillah, Commissioner of Insurance at the Central Bank of The Gambia, said WAICA Re has come at a very important time, especially at a time when the sub-region is working towards closer economic integration.  “It is also an opportunity for the sub-region to prove that we believe in insurance because it is through that the insurance industry will develop,” he said. Babou Cisse, a doyen of insurance and one of the founding fathers of WAICA who initiated the formation of WAICA Re thirty years ago, thanked the current executive of WAICA for making the dream that he and his colleagues decades ago had, come to pass. He also emphasised the importance of reinsurance in the sub-region, calling on all and sundry to throw their weight behind the insurance industry in Africa. At the end of the forum, the CEO of WAICA Re told this reporter that “already some insurance companies in The Gambia have pledged their support for WAICA Re in terms of money; that is raising the capital as well as giving business to the corporation”.