Ghana’s reinsurance industry has become increasingly crowded over the past few years, bringing lots of competition to an industry that used to be dominated by the state-owned Ghana Reinsurance Plc. – which however remains the industry leader. Over the past couple of decades, private competition in Ghana’s reinsurance market has come in the form of Mainstream Re and GN Re, although foreign global reinsurers have had big pickings from the Ghana market too, operating through extensive corporate networks.
Now, however, Ghana’s reinsurance industry is about to witness a first which will have a major impact on the market, and that of primary underwriters.
W-Safe Re has submitted its application for a licence to operate as both a life and non-life reinsurer, thus becoming the first international, privately-owned reinsurer in Ghana and massively developing the Agriculture insurance space across the African continent as well.
To be sure, W-Safe Re is not one of those ‘time-honoured’ insurance practitioners which have over time won business here and there. While comparisons can be drawn with regard to how old W-Safe Re is in the industry relative to other key players, it is a reinsurance company born into the new era of a digitised, global economy, replete with international value chains and major financing requirements.
Although the company was only established in 2018, it already has a presence in the Caribbean islands and now Ghana. Ghana will be followed by Cameroon, Rwanda/Uganda and the Dubai Financial Centre. These strategically selected locations will enable W-Safe Re to diversify its portfolio and mitigate the effect of country exposures.
Applications pending for licences to be granted in Rwanda and Uganda are a clear indication that Africa is a priority.
But W-Safe Re has already decided on Ghana as its continental hub for West Africa and selected markets.
The company’s Managing Director explains that he is not perturbed by Ghana’s ongoing economic difficulties. “Ghana is not alone in the economic difficulties instigated by the global COVID-19 pandemic,” says Ashishkumar Bhatt, “and it has been rebounding strongly.” He expects Ghana’s current economic troubles to plateau and be replaced by resumed growth before end of the year.
To be sure, W-Safe Re aims to offer a broad range of reinsurance services. It has already proved adept across business lines – Life, Health, and Personal Accident reinsurance along with general business, particularly Engineering – but the most popular can be expected to be insurance bonds.
The industry regulator has regarded insurance bonds with suspicion – and for good reason. Performance bonds issued for government contractors often default as a result of delayed payments.
W-Safe Re, though, reckons that insurance bonds of various types will do customers a world of good; and asserts that it has worked out the ways in which such positively impactful insurance bonds can be issued safely. This means primary underwriters will be able to step up an area of insurance highly demanded by needy business clients, but avoided by most insurers with the industry regulator’s tacit support. Crucially, W-Safe Re will be operating in Ghana with sturdy financial solidity – at least US$15 million in core capital and another third as much in reserves – and be combined with its already successful model for managing contingent liabilities created out of performance bonds.
Already, W-Safe Re has begun building its Africa team. In Ghana, the widely experienced and accomplished Kwaku Baah-Nuakoh is the company’s Country Manager, ably assisted by Mr. Alex Amartefio, a Director. After getting its licence, a few more seasoned staff will expectedly join to augment various positions in the Ghana Office: such as Life, Business Analyst and Technical/Marketing roles as part of winning market share quickly, and imparting global reinsurance practice to Ghana’s expanding market.