Magazine article New African

One Continent, OneRe: The Insurance Sector in Africa Is Relatively Undeveloped, but a New London-Headquartered Reinsurance Company Is Set to Underpin the Continent's Industry by Covering Some of the Risk Insured by African Institutions

Magazine article New African

One Continent, OneRe: The Insurance Sector in Africa Is Relatively Undeveloped, but a New London-Headquartered Reinsurance Company Is Set to Underpin the Continent's Industry by Covering Some of the Risk Insured by African Institutions

Article excerpt

When two South African-born brothers, Andrew and Robert Lewis, sold their African insurance business, Global Alliance, to the Barclays Group in Mozambique, they might have taken early retirement, bought a couple of yachts and a desert island and settled into a life of ease. Instead, they each invested $25m and set up a reinsurance company to serve local and international clients, bringing together global capacity and African knowledge.

Although they are sixth-generation South Africans, the brothers opted to place the headquarters of their new business, OneRe, in London. The pull of the global hub for the international insurance industry was stronger than to familiar Johannesburg, or Mauritius with its easy tax regime.

Meeting with OneRe's chief executive, Andrew Lewis, New African learnt more about the beginnings of the new company which, at the beginning of the year, acquired regulatory approval from both the Bank of England's Prudential Regulation Authority and the Financial Conduct Authority, the first reinsurer approved under Britain's new system of financial regulation.

OneRe is based on the experience of an antecedent company, Global Alliance. As Lewis explained, they "had three insurance licences for Global Alliance, one each in Ghana, Angola and Mozambique. The business wrote all classes of insurance including life insurance but our main focus was cover for global investor companies in Africa, many of the very large brands that have invested in a range of sectors from the energy side, right the way through to the brewers, to the construction companies and various others."

Perhaps predictably, Lewis preferred not to be drawn on naming the brands and the companies that Global Alliance was writing insurance for, but gave every indication that it was focused on the top tier of corporates.

"I would say, of the top 100 companies operating in those territories, we did business with about 80% of them. The business was very good for us and we became one of the biggest insurance companies in Mozambique and certainly the largest private insurance company in Angola. We were constrained in Angola because the country's oil companies' business was always controlled by state insurance companies.

"However, I would say that both markets are very fast-growing, and we did exceptionally well. Then, in 2010, we were approached by Barclays. They were looking to expand their bank insurance offerings, and they made an offer which we accepted.

"We took the view that we were in our mid-40s and had a bit of money and Africa was the place to be. We certainly saw Africa as a fast-growing environment and unchartered territory for any decent insurance grouping and so we formed OneRe, decided to base ourselves in London, one of the prime gateways into Africa, and started the regulatory process to establish a reinsurance business."

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You might describe reinsurance as a business that hedges the business of insurance companies, taking over some of their risk. OneRe's business model is to choose one company to do business with in any one country, and they have identified 38 African markets that they want to enter. In fact, Lewis was travelling just a few days after we met for talks in East Africa.

But going back to successfully establishing OneRe, Lewis said that it took some time. "We had to convince the regulators that we really knew what was going on in Africa. Remember, they never really had any exposure to Africa's insurance business. They finally approved us. We were the first in the UK. …

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