Established in 1976 by 36 African member States of the Organization of African Unity (OAU), now African Union, the African Reinsurance Corporation (Africa Re in brief) is committed to develop insurance and reinsurance business in Africa and to retain big sums of premiums that goes out of the continent, a move expected to the develop African economies by providing them with the much needed long term finance.Created after an initiative of the African Development Bank (AfDB), Africa Re mission is to reduce the outflow of foreign exchange from the continent by retaining a substantial proportion of the reinsurance premiums generated therein. In an exclusive interview with Mr. Corneille Karekezi, the Group Managing Director / Chief Executive Officer of Africa Re, participating in the recently concluded FANAF Conference in Kigali, said that about 80 % of the reinsurance premiums paid by insurance companies in Africa to buy their reinsurance covers are paid to reinsurance companies outside the continent and only 20 % is shared by African reinsurance companies. "Still a long way to go and we are competing with big boys in the industry like Munich Re, Swiss Re, Hannover Re and other international reinsurers” he noted. 92 % of the Africa re business comes from Africa, while the remaining 8 % comes from Asia where the company underwrites business in all Asian countries. South Africa, as the major insurance market in Africa with 80% share, contributes to the tune of 35 % of the total premiums representing $260 million.Africa Re is composed of 41 member countries (including Rwanda) of the African Union with 38.75 % shares, 101 African insurance and reinsurance companies that constitute 32.25% of the share capital, SONARWA a local insurance company is among them. Government of Rwanda joined in 1982 with a 0,41% of the share capital and to date all local insurance companies are reinsured by Africa Re. In 2003, the shareholding was opened to non-African (all European) International Development Finance Institutions whose hold currently more than 22.9% of the company share capital. They include the International Finance Corporation (IFC), a branch of the World Bank, German development institution (DEG), member of KfW Banking Group, the Entrepreneurial Development Bank of the Netherlands (FMO) and PROPARCO, the private sector arm of the group Agence Française de Development (AFD). The European institutions, all rated AAA by major rating agencies, have contributed to raise the visibility of Africa Re as well as to improve the corporate governance of the company. "Having these reputable and big investors on board builds confidence to our clients especially on corporate governance. All these companies are rated AAA for their financial strength and credit worthiness” Karekezi said.Africa RE has maintained in 2011 its A- Financial Rating with Stable Outlook, both with A.M. Best and Standard & Poor’s, when many world reinsurers were downgraded. This strong and excellent financial rating, obtained since 2003, means that the company represents a very reliable security with a strong balance sheet, a well diversified business, modern and competent management, strong liquidity as well as adequate enterprise risk management system. Africa Re, the largest reinsurer in Africa and the Middle East with a total premium income of US$ 630 million in 2011, an amount close to Rwf 380 billion, was ranked the 40th company in the Top 40 Reinsurance Groups by Standard & Poor’s (2011). "With our experience, size and financial rating ranking, we provide security to insurance companies and they are confident to write insurance risk on the primary market because they are assured of being paid back in case of a claim,” Karekezi emphasized. Adding "We give them capacity and capacity which is highly ranked.”Current figures show that the company is working under a paid-up capital worth US$ 300 million, US$ 480 million of shareholders’ funds and total assets of US$ 1.2 billion. Last year the company recorded US$ 70 million (Rwf 42 billion) profit after tax, based on available management accounts. To strengthen its capital base due to expected rapid growth from its core markets, Africa Re has called in 2010 the 4th Capital Increase to bring its paid-up capital to US$ 300 million and its shareholders funds to US$ 600 million by end of 2012. From its technical reserves and shareholders’ funds, Africa Re has set aside an investment fund currently close to US$ 800 million to pay for claims and that fund is invested in term deposits, liquid financial instruments on stock exchanges, sovereign and corporate bonds and private equity funds which identify projects for investment. Any insurer within the 41 countries that are members of Africa Re is supposed to give at least 5 % of its treaty reinsurance covers to Africa Re as mandatory reinsurance cessions. However, with time, the size of voluntary reinsurance cessions has risen to reach in 2011 a share of 93% of the company’s total premium income. Africa Re has presence in eight offices in Nigeria (Lagos) which is the head office, Morocco (Casablanca), Kenya (Nairobi), Ivory Coast (Abidjan), South Africa (Johannesburg), Maurtius (Port Louis), Egypt (Cairo) and the recently opened office in Ethiopia (Addis Ababa). In South Africa and in Egypt, its presence is through fully owned subsidiary companies, Africa Re (South Africa) Ltd. since 1995 and Africa Retakaful, a company specialized in Islamic reinsurance and based the Cairo Free Zone, which started operations in 2010. Takaful and Retakaful are insurance and reinsurance models which follow the Quran principles, because traditional insurance is not accepted by the Sharia mainly due to its contractual uncertainty (gharar or gambling).The leading reinsurance institution targets to open more three offices in the near future in Algeria, Angola and in Ghana. Africa RE opens an office when at least a particular country is able to generate reinsurance premium income worth US$ 10 million and it has been recorded it in Ghana and Algeria. Karekezi added; "For Angola, we have not reached US$ 10 million but the country has a fast growing insurance industry boosted by oil production and one of the fast growing economies in the world. Prospects there are very good.”  Africa Re before this year ends, they intend to open an operational office in Brazil to diversify its business portfolio and write business from that country which has recently overtaken the UK in terms of economic size. Africa Re Nairobi Regional Office is certainly the biggest reinsurer of the Rwandan insurance market where it leads most of the reinsurance treaties. The reinsurance premium income Africa Re gets from Rwanda is slightly above US$ 2 million per year for a total premium income of US$ 95 million written by the Nairobi Regional Office.The African reinsurance market has grown in the recent years but its growth is hindered by the various challenges faced by the insurance market, among which are the low purchasing power of the populations, the low insurance awareness, the struggling and instable economies, the weak regulation, all factors translating into a very low Insurance Penetration Rate (total premium income over GDP), except South Africa which has 14 percent  insurance penetration rate, a figure slightly above the benchmark of middle income countries of 10 % as opposed to many African countries which are 1 percent  or even below. Recently monetary policy statement indicated that Rwanda’s insurance penetration rate is at 2.3 percent. The topic of how to increase the insurance penetration in Africa was among the issues tabled during the recently concluded annual insurance meeting called FANAF Conference that gathered in Kigali from 20th to 23rd  february.Karekezi, who was the Chief Executive Officer of SONARWA the local leading insurance company,  left Rwanda in 2009 to become the Deputy Managing Director and Chief Operating Officer of Africa Re for a transitional period of two years before to take the helm of the company as the Managing Director and Chief Executive Officer. He accessed that position in July 2011 after a formal appointment by the General Assembly in Addis Ababa, Ethiopia, in June 2011. Recalling that period, he said: "the competition was on continental level and I emerged as the best candidate, which is also good not for me personally but for my country because it’s the first time Rwanda and East Africa reached that position”. Having worked in the Rwandan insurance sector for 16 years in different positions, he is optimistic that the sector will follow the path of other socio economic sectors where Rwanda is rather leading the way." With the reforms already made and others being in the pipeline, I have no doubt that the insurance sector will go along with the economic development and the future is bright for Rwandan insurance sector,” he said. There is commitment from all the market players but more focus should be on training and capacity building within the industry if Rwanda is to become a financial hub.Africa Re is fully prepared to meet the challenges of the changing landscape without compromising on its tradition of creativity, innovation, professionalism and excellent service delivery.