Transforming Africa’s Reinsurance Landscape
Writer: Emily Jarvis
Project Manager: Callum Philp
First Reinsurance Brokers Ltd (FirstRe) was incorporated in 1993 and licensed by the Insurance Commissioner as the first locally-owned Kenyan reinsurance broker to transact reinsurance broking services. During the renewal of reinsurance treaties for the year 1994 in the Kenyan Market, FirstRe managed to book its first business. Since then, there was no looking back.
The Company was established on the backdrop of a quest to help the African insurance industry enhance technical capacity in both the insurance and reinsurance sectors. Prior to the establishment of FirstRe, the majority of reinsurance brokerage services for the region’s industry were done by foreign brokers, either from the UK market or Asia, with particular interest from India.
FirstRe was the first to set up shop in the local reinsurance market in Nairobi, Kenya. Ordinarily, being a first-mover would prove advantageous in the early stages; already ahead of the competition in terms of superior brand recognition and customer loyalty. “However, due to many foreign briefcase reinsurance brokers from Europe and Asia, early business was lost as cedants were unaware and uneducated in terms of the value-add services that could come from a local reinsurance broker. At this time, there was also the issue of local outfit mistrust and the attitude that nothing good could come from a local company,” further explains Group Managing Director, Mrs Jacinta Karita.
“FirstRe had to prove itself capable of the level of technical knowledge, professionalism, availability and dedicated service delivery that had previously only been associated with international business; then take this and apply a localisation strategy.
“Due to the above availed to our clients, FirstRe has remained a leader in the region, even after witnessing the influx of many competitors in the market, who try to capitalise on our success. We have accumulated a big market share, and remain on top due to our expertise and customer loyalty levels,” she adds.
Since day one, Mrs Karita has grown the business exponentially; from management of an order book worth KSh2 million (US$22,000) in its first year, to more than KSh10 billion (US$111 million) in the present day. She has influenced steady growth in the diversity of both her workforce and the company’s geographical expansion, to include a plethora of capabilities for clients across the whole of Africa. “What started in Kenya as a local business rapidly transformed into an international broker with business partners all over the world. We were quick to learn that reinsurance is a global business, therefore FirstRe has adapted to build a formidable reputation for professionalism and credibility, forming relationships all over the world,” says the Group Managing Director.
The combination of indigenous practices in East Africa matched with international standards makes FirstRe a competitive contender in Africa’s reinsurance sector; bringing ISO quality management standards to Kenya to offer the continent a truly tailored and high quality brokering service. “We intently listen to our clients, many of which did not receive this bespoke service from others in the past, which is why we have so many longstanding relationships with insurers; some of whom have been with us since our inception,” she further explains.
Not only do these holistic relationships help generate new business, but through continued contact and interaction with clients, FirstRe has been successful in teaching local people to appreciate reinsurance as a necessary product. “Improving potential clients’ insights and understanding of reinsurance is a challenge which we hope will be less apparent as we further educate the market.”
This year, FirstRe will continue to focus on growing its treaty reinsurance contracts to free up the capital of insurance companies and reduce underwriting costs and associated risk for them. “What this means is that we, as the reinsurer, will cover a specified share of all insurance policies issued to us by the ceding company under a contract, with an emphasis on risk management,” details Mrs Karita.
The broker works with insurers to find the right product in both the life and general reinsurance areas to enable them to effectively manage the combination of premium growth, claims settlement and a favourable return on capital. “FirstRe is well structured to meet the needs of a variety of clients and our organisation is supported by our own IT software to make sure that we can always cater for the different supports needed. Every process is computerised and this modern approach to business means we can replicate our products and services easily into other markets,” highlights Mrs Karita.
Currently, FirstRe is in the market looking for expansion opportunities in microinsurance treaties, while also keen to increase its coverage of East Africa by moving into Ethiopia in the future. “We are looking at different markets and ways that will enable them to appreciate what we can offer; and Ethiopia is one of these markets,” she adds.
Overall, FirstRe’s business levels have been dictated by growth in the continent’s insurance sector as Mrs Karita explains: “When insurers expand into new markets, this is another entry level for FirstRe and given the increased appreciation for insurance products in Africa in recent years, the market is moving in the right direction for us to maintain or even exceed current growth levels.”
“A drop in the ocean”
In terms of finding the right staff, Mrs Karita is confident that FirstRe has all the right procedures and programmes in place to help hire those right for the job: “From expatriates to students fresh from university, we are very much invested in identifying and working with experienced local people in Kenya. This being said, we have not closed our doors in terms of international employment because it brings another dimension and blue-sky thinking into the business.”
Internal training includes everything from education in different specialisms, to tailor-made external training targeted at educating specific clients/insurers on the products that FirstRe offers.
“We are proud to say that we have been able to build a team of strong and dynamic, self motivated, dedicated, cohesive and qualified professionals that carry out all FirstRe services. As a company we have embraced diversity in terms of gender and age. Additionally, we also gear ourselves to engaging staff from other regions to diversify even further,” she continues.
With the right attitude towards increasing staff capacities and retaining strict high standards, FirstRe hope to have a footprint in every African country in a long-term vision; learning how each country’s insurance/reinsurance sector works and how best to roll out its products to make a valuable impact. Moreover, the Company has provided extensive holistic support to its partners and clients, which hasn’t gone unnoticed by those in the market looking into reinsurance.
“Africa is a huge country and FirstRe’s current market coverage is really just a drop in the ocean. Although there will be many challenges in moving into new geographies – including addressing the language barrier in some cases – we intend to work with partners to demonstrate our ability to create a personalised service, while simultaneously spreading appreciation for reinsurance products over a much broader footprint,” concludes Mrs Karita.