January 1 has seen a number of new managing general agents (MGAs) launch with a specific focus on Africa.
To date, MGAs have barely featured in the African insurance marketplace, with regulators making no provision for the mechanism and therefore preventing MGAs from registering in local markets.
Companies such as Africa Specialty Risks have been among the few to make its mark as an MGA in Africa. As it stands, MGAs are becoming licensed in London, Dubai and, the only African option, in Mauritius.
However, there are a number of new names entering the market and these new MGAs believe they have a really valuable role in the African marketplace and hope to see change in the coming years as regulators too recognise their value.
As Tatenda Katoma, former CEO at Grand Re and now CEO of Dawn Risk, says: “We believe that the trend of MGAs coming into Africa is long overdue.
Tatenda Katoma, CEO of Dawn Risk
“They come in as a specialist and fill the gaps which traditional reinsurers and brokers haven’t been able to fill. MGAs come in with specialist knowledge; they have the relationships in the local market and allow reinsurers to deploy capital most efficiently.”
Dawn Risk launched on January 1, offering a wide range of products including fire and engineering; marine, political violence and terrorism and accident lines. However, Katoma admits that one of his first jobs has been to explain to local markets exactly what an MGA can do.
“I have had to explain what we do to both regulators and to reinsurers who haven’t seen this type of operation before,” said Katoma.
Another function of MGAs is to effectively pool reinsurers’ capital. “By bringing together capital from a number of reinsurers, we are able to offer risks that they would not be able to do on their own,” says Katoma, “and that enables more capital to stay within the continent.”
He hopes that regulators will see the opportunity and make legal provision for MGAs. This is echoed by Sam Okoth of Sey Re Underwriting, who adds “MGAs are trying to fill the gaps and provide more capacity to Africa. They also bring capacity from more established markets to support local markets with the required capital.”
Another important factor, says Okoth, is that MGAs also bring in specialists and help upskill local markets, improving technical knowledge in a more cost-effective manner than relying on reinsurers to recruit whole specialist teams.
“MGAs bring in local opportunities to the continent, using local experts and giving them international experience,” he adds.
“For reinsurers it is a win-win,” says Tatoma. “Their capital is used efficiently and they rely on the MGAs for marketing, sales and recruitment.”
George Otieno, director and principal officer at AJG Reinsurance Brokers, also applauds the influx of MGAs.
“It brings more capacity,” he says “and gives clients more options. It is a growth area with less restrictions than conventional programmes. It also helps reinsurers as it is a less expensive use of capital.”
Among the new names arriving in the market this January is London-based Athena Re which is a specialist and reinsurance MGA which said it has “a dedicated focus on delivering bespoke reinsurance solutions to the African continent, as well as select territories across the Middle East, Asia-Pacific, and Latin America regions.
“Backed by highly-rated securities from Lloyd’s and across the globe, our mission is to bring top-tier, tailored capacity and innovative solutions closer to our clients through exclusive broker channels.”
Product areas include financial lines: from cyber insurance for SMEs and commercial crime to directors’ & officers’ liability. It is headed by Chrispin Onyancha, formerly of Kenbright Reinsurers, who is now leading Athena Re from London.
Onyancha believes MGAs offer the African market real opportunities to expand and to take advantage of international expertise as well as capacity.
“There is so much untapped potential across Africa,” he said, “and we can bring A-rated capacity to much needed areas.”
He is focusing on financial lines at launch but sees plenty of opportunity in other areas, from marine and aviation to property.
In response to fears that there might be too many MGAs coming into the market, Onyancha is confident there is plenty of room for everyone, because MGAs can bring much needed innovation and expand the reach of insurance across the continent.
“I am sure there is a piece of the cake for everyone,” he said, “we need to build capacity and we can do that by bringing this new model into the market.”
Onyancha said there is a real need for education around what MGAs can bring for everyone, from regulators to insureds, but he is confident in the model.
Another new name is Azura Global Risks founded by US insurance entrepreneur, Elijah Norton, with the intention of presenting a global, multi-line offering that is focussed on excellence and integrity. Based in London, Azura is led by CEO Lesley Kruger and will offer products in international property; credit bonds and surety; power and mining; and energy.
Philippe Bara, chief underwriting officer at Azura, said “We see the growing presence of MGA capacity across Africa as a powerful signal of the continent’s evolving insurance landscape and economic momentum. Azura is proud to play an active role in supporting this growth and unlocking sustainable reinsurance capacity for the region.”
CEO Kruger added “As a recognised centre of excellence, supported by highly experienced reinsurance specialists across key lines of business, we connect local demand with the capacity and expertise of leading international reinsurers.”
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