Mikir Shah, CEO of Africa Specialty Risks, explains why the company chose to set up its Reinsurer in Mauritius as a central hub for Africa, in view of its naturally bilingual and educated population and established insurer presence expanding into the continent.

Africa Specialty Risks is backed by Helios Investment Partners, the largest Africa-focused private investment firm, through its latest private equity fund Helios Investors IV, L.P. whose investors include CDC Group and the International Finance Corporation.

You announced the launch of Africa Specialty Risks in Mauritius in May 2021. What can you tell us about the company and its activities?

Africa Specialty Risks (ASR) is a reinsurance business focused on providing risk mitigating insurance solutions to the African Corporate and Specialty market. The company was established last year in the UK, as a large (re)insurance hub in Europe, enabling us to provide global capacity and expertise to the African market.

We are backed by Helios Investment Partners, the largest Africa-focused private investment firm, through its latest private equity fund Helios Investors IV, L.P. whose investors include CDC Group (the UK’s development finance institution) and the International Finance Corporation (a member of the World Bank Group).

In May 2021, we were very pleased to announce that we launched a fully capitalised and licenced Reinsurer based in Mauritius to meet the needs of the African continent, and that we have also been granted an Insurance Manager licence from the Financial Services Commission in Mauritius, as we prepare to establish our business on the ground.

Why have you chosen to set up Africa Speciality Risks Reinsurer in Mauritius?

We have chosen to set up our Reinsurer in Mauritius as we see it as a central hub for Africa. Mauritius has a naturally bilingual population, allowing us to operate effectively across the vast majority of African countries. It has an educated population, making it an ideal reinsurance hub because there is an abundance of skills that can be developed further with training. It already has an established insurer presence expanding into the continent, and we believe that Mauritius has the capability to become the reinsurance hub for Africa.

Mauritius will be one of our major operations and we are pleased to count on the support of the Mauritian Government and the FSC. We will have underwriting, claims management, business administration, compliance, accounting and business development functions in Mauritius. We will shortly be making further announcements regarding our plans for recruitment on the island.

What opportunities have you identified in the African reinsurance and insurance market?

We have identified a capacity gap on the continent for Corporate and Specialty (re)insurance business and we aim to work closely with local insurance and reinsurance companies. Rapid expansion is predicted for the African (re)insurance market with the second fastest growth forecast in the world after South America. It is growing nearly twice as fast as North America and over three times faster than Europe. The region even outperforms Asia, with 7% year-on-year growth. We see this as an opportunity, in collaboration with our clients, to enhance the insurance penetration across Africa.

Our aim is to provide additional African-domiciled capacity to the continent, as COVID-19 has led global reinsurers to focus more on their home markets.

What type of solutions is ASR providing to the market and in which countries?

We provide risk mitigating solutions across the African continent including the surrounding islands. ASR currently offers capacity across Property, Construction, Political Risk, Trade Credit, Energy, Liability, PVT (War, Political Violence and Terrorism) and Parametric with further lines of business being developed.

We have also announced plans to establish business development hubs in multiple African countries, including Morocco, Kenya, South Africa, Cote d’Ivoire and Nigeria in addition to Mauritius.

What sets Africa Specialty Risks apart from existing players on the market?

We offer bespoke risk mitigating products that are not generally available to the continent. Building out African-focused (re)insurance products now can also lay the groundwork to support businesses and investors against current and future risks, including those related to climate change. For a continent where agriculture provides employment for over 50% of the population, the impact on livelihoods is critical. Parametric insurance, which guarantees a direct payout after a qualifying event, offers a means to mitigate against unpredictable external risks in a way that traditional insurance products cannot. This is an example of the multiple specialty products that ASR is developing for its clients.

What will be the benefits to Mauritius of ASR domiciling its Reinsurer in the country?

We are convinced that Mauritius will benefit from having ASR domiciled in the country with active operations, supporting the Mauritian Government's aim of being the preferred route for investment activities into Africa.

ASR will be a substantive business with an experienced management team involved in the day- to-day operations, and we will also invest in and upskill Mauritian employees providing aspirational career prospects. We anticipate that the business will also generate income for local service providers, local banks and other local infrastructure. Our investment management activities will be global in nature, but managed out of Mauritius. We believe that our activities will contribute towards making Mauritius a leading reinsurance hub in Africa and facilitating access to previously untapped markets.