The African Reinsurance Corporation (Africa Re) has posted a net profit of $23.7m for the first six months of 2021, a 27% increase on the same period last year.
Dr Corneille Karekezi, group MD/CEO of Africa Re, said: “We remain cautiously optimistic for the rest of the year, barring any unforeseen major losses.”
The group reported improved underwriting and investment performance, with gross premium income reaching $421m in the first six months of 2021 – 7.2% higher compared to the corresponding period in 2020 – a reflection of the ongoing recovery of businesses and society from the new Covid-19 operating environment.
The half-year report said the good performance was supported by additional facultative acceptances, mostly in the oil and gas portfolios. There was also a positive impact from an improvement in the exchange rate of a few of its operating currencies against the US dollar, especially the rand and central African franc. However, the gains on currency fluctuation were slightly offset by the significant devaluation of the Sudanese pound.
The year-to-date claims experience as measured by the net incurred loss ratio improved to 61.9% in the first six months of this year, compared to 64.6% in the same period of 2020.
The restructuring of previously poor-performing portfolios continues to yield positive results on the claims experience, despite a slight increase of the overall cost of the Covid-19-related insurance claims, which continue, however, to be within expectation.
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Burundi and Kenya Update: Expensive COVID-19 test fees limiting access to cross-border opportunities for poor households
Food stocks from above-average season 2021 B crop production, coupled with stable food prices are supporting Minimal (IPC Phase 1) outcomes across most of Burundi. However, Stressed (IPC Phase 2) outcomes are expected in the Eastern Lowlands livelihood zone through January 2022. Stressed outcomes are driven by the sanitary ban on maize imports as well as COVID-19 restrictions banning cross-border labor, cultivation, and trade opportunities in Tanzania, resulting in localized below-average food supplies.
The Ministry of Health confirmed a resurgence of COVID-19 cases in recent months. The presence of the Delta variant in Burundi was confirmed on 15 July. Kirundo province has been most affected by the pandemic since mid-July with the greatest portion of new daily cases. The increase in new cases is expected to delay the re-opening of the Tanzanian and Rwandan borders, maintaining below-average income sources for poor and very poor households in the Eastern and Northern livelihood zones relying on cross-border labor opportunities.
Driven by 2021 B Season crop harvests, staple food prices stabilized between May and June. Food prices are trending near 2020 levels except for cassava which increased 23 percent since last year due to cross border trade restrictions. While in line with 2020 prices, staple food prices remain between 20 and 50 percent above average, though maize prices are around 10 percent above average. Palm oil prices have been atypically increasing. June 2021 prices were 30 and 36 percent higher than June 2020 and the five years average, respectively. The increase is driven by increased exports and the use of palm oil by the cosmetic industry. While consumers are forced to pay a higher price, it is favorable for households cultivating and refining palm oil, located in Imbo Plain and Congo Nile Ridge livelihood zones.
Since 2017, UNHCR has facilitated the return of around 165,000 returnees. Nearly half returned after September 2020 and the numbers of returnees continues to increase thanks to relative political stability. Most of the returnees (79 percent) arrived from Tanzania and are mainly hosted in the Eastern Lowlands livelihood zone. Upon arrival, returnees receive three months of assistance. Thus, 48,000 returnees who came between May and July still have food assistance stocks, driving None! (IPC Phase 1!) outcomes while, nearly 40,000 returnees who arrived between December 2020 and April 2021, have already exhausted their 90 days of assistance and are expected to face Stressed (IPC Phase 2) food outcomes in July.