‘In Nigeria alone we lost over $3 million in 2016 over currency devaluation’

Abiola Ekundayo, managing director/CEO, WAICA Reinsurance Company said reinsurance business is an international business and not limited by boundaries. In this interview bares his mind on the company’s expansion, business models. Excerpt:

 Having operated since 2011, what has the business environment looked like?

When we talk of reinsurance, reinsurance has no bounds really, so to say. We started out as WAICA Re belonging to the West African English speaking countries Nigeria, Ghana, Sierra Leone, Liberia, and Gambia predominantly and then it was a Pool really. The reinsurers in the region came together to set up the Pool but their intention then was that this company we are setting up will eventually become  a reinsurance company but it took them almost 30 years or more before they could achieve that goal in 2011. So when you are running a reinsurance that’s why it is difficult or not very common to see an individual having a reinsurance company. Reinsurance Company by nature is an international business. One of the differences between insurance and reinsurance is that insurance is local, reinsurance is international. Another one is reinsurance is secondary, insurance is primary.

If you want to do reinsurance it has to be international. You meet people, you do business from anywhere in the world. If you want to concentrate on your country or your neighborhood, you won’t go anywhere. That’s why when we started really because we inherited WAICA Re from WAICA Pool, even that year we started to get business from all over Africa, from North Africa, West Africa, East Africa, from all over we were getting business. It is not possible as a reinsurance company to concentrate on your country alone, so we have even gone beyond Africa now.

We do little from the Asian countries. So the environment you cannot say is conducive or not, it is global. You look at your business as a global business then you want to approach it globally which is exactly what WIACA Re has done. Yes if you look at the business from West Africa, when I say West Africa I mean English speaking West Africa, we are still okay. We are very close to almost half of the market size. But when we started I told my team that, look, I don’t want us to concentrate on only West Africa, I want us to go globally, I want us to go anywhere and do business, and you know there are areas you don’t go to but even in Africa if you want to concentrate in Africa alone you can do well. That’s where you see some reinsurance they don’t want to go beyond Africa but in our own case we have gone a little bit beyond Africa. We are conscious of where we are going,  that’s why when others are burning their fingers here and there we thank God it’s not  it’s not the same with us. It is not by our own making we have successful scaled hurdles. You can see the earth quake that occurred 2015 April in Napa. We used to do business in NAPA but honestly we only paid small claim. But our colleagues there burnt their fingers. Today some people have approached us to be doing business from India; I told them that we are not ready for it now. It’s not because we can’t do it but we have to study the market and know exactly where we want to go. They have been on my neck that is why we can’t do from Philippines and so on but let me tell you something 2014 or so there was a case, one of us accepted business from Philippine because it is an electricity something and I told you, we made a wrong decision but because of our image we were not able to cancel the business because it will affect us so we kept it.

You are planning expansion to mother markets across Africa; take us through where and where you are currently operating?

This is how we have been structured in WAIC Re. We have the head office in Sierra Leone. Under Sierra Leone we have the head office in Abidjan Cote D’ivoire writing business for the French speaking countries. Then we have a contact in Nigeria, then Sierra Leone, Tunisia, Ghana, we are together. But now we have set up a subsidiary in Kenya. We wanted to register the contact office here but they said no that the window of contact office is closed shortly after they granted to SICCA Re. So we had no choice so we set up a subsidiary in Kenya so far we have paid 10 million dollars they have given us approval in principle. Our license will be out any moment from now. We have taken accommodation well furnished. We have an office now also in Southern Africa, that is in Zimbabwe. What we did in Zimbabwe was to acquire a reinsurance company and then the minimal capital in Zimbabwe is 5 million dollars which we also paid.  Tunisia is a contact office under Sierra Leone. When we wanted to start we approached their insurance commission that we wanted a subsidiary then they advised us that we should set up a contact office so that we don’t pay much. They only requested us to pay 7,000 euros which we paid last year so we have given them our papers. Even before then we wanted morocco. Morocco is a closed market so we could not do business in morocco so we abandoned that one and went for Tunisia. Tunisia is friendly. It is a liberalized market and they received us. They even said pending the time you get your certificate you can be doing business, then we started our business. It’s not Tunisia alone we have Algeria, Mauritania but not Egypt because Egypt speaks English and we get business also from the Middle East. So in Tunisia the potentials are there. It is a good place to do marketing. It is friendly and of course the currency is very strong. So any money you make there is good but our philosophy is that you don’t transfer money from any country to another we keep the money in the country where we are. We have investment account, we have premium account so we don’t need to touch anything even in Nigeria we don’t transfer money.

Give us highlights of what you did in 2017 in terms of performance?

I can say 2017 was as good as any other year as from the time we started. We have been able to write about 62.5 million dollars premium and profit of almost 7 million. We have been paying dividend to our shareholders continuously. This is the fourth now since we started. We paid the first one in the first year of operation and up till now we have continued to pay. So we have paid about 2.5 million dollars to our shareholders as dividend. Not that everything was rosy in 2017, there were issues and even in 2016, but WAIC Re would have been able to do better in term of what we are doing except for currency devaluation in all the countries and policies are not stable. In Nigeria lone in 2016 we lost about 3 million dollars then. things will get better, but generally speaking we are trying our best because there is more competition now but we are just lucky that the brokers want to do business with us.  For 2018, we are looking to surpass what we did last year by the grace of God. Another problem that we have been facing is the collection of outstanding premium. But now this year we are taking a giant stride. I told my team I will not recognize premium production. What I will recognize is collection. So your collection is your production for the year. If you have produced 10 million and you collected 4 million, 4 million is what I will recognize and honestly from January till now it is working, we have collected almost all our premiums.