Africa Re sustains strong balance sheet in Q1 2026 performance

Nike Popoola

The African Reinsurance Corporation (Africa Re) has released its financial results for the first quarter ended 31 March 2026 (Q1 2026), reporting resilient performance despite softer earnings and challenging investment conditions.

Africa Re maintained a strong balance sheet in Q1 2026, with total assets rising to approximately US$2.191 billion from US$2.167 billion at the end of 2025. Shareholders’ funds increased slightly to about US$1.398 billion, underscoring the Corporation’s solid capital base and financial resilience.

The results, obtained by Dailyeconomy today showed total liabilities stood at approximately US$793.3 million, compared to US$770.4 million at year-end 2025. The Corporation therefore entered the remainder of the year with strong capitalisation, adequate liquidity, and sustained capacity to support clients across its markets.

Africa Re recorded a profit of US$16.0 million in Q1 2026, down from US$25.6 million in Q1 2025. This represents a 6.4% profit margin on reinsurance revenue and reflects resilient operating performance despite lower earned premiums, reduced retrocession recoveries, and weaker investment market conditions.
Net reinsurance service result stood at US$30.7 million, while net investment income amounted to US$17.5 million.

Reinsurance revenue for Q1 2026 declined to US$249.5 million from US$262.1 million in Q1 2025, despite a 9.9% increase in gross written premiums under IFRS 4. The slower conversion of written premiums into IFRS 17 revenue was mainly due to higher reserves for unexpired risks.

Reinsurance service expense declined by 5.8% to US$184.0 million, but this was insufficient to offset the revenue drop, leading to a marginal decline in reinsurance service result before retrocession to US$65.5 million, compared to US$66.8 million in the prior-year period.

The net expense from retrocession contracts increased to US$34.8 million from US$32.5 million in Q1 2025, driven by lower loss recoveries from retrocessionaires. As a result, the service result before non-attributable expenses declined to US$30.7 million, while non-attributable expenses remained stable at US$5.6 million.
A slight improvement in interest rates helped reduce net reinsurance finance expense to US$11.6 million from US$12.5 million, partially cushioning the overall decline in operating performance.

Africa Re’s investment portfolio generated net investment income of US$17.5 million in Q1 2026, compared to US$22.0 million in Q1 2025.
Investment and other income under IFRS 4 stood at US$16.6 million, representing a 23.9% year-on-year decline. The drop was largely driven by capital losses on listed equities and bonds affected by geopolitical tensions in the Middle East.
Despite short-term volatility, the Corporation expects market conditions to stabilise over time and remains committed to preserving value through disciplined asset allocation and prudent risk management.

Group Managing Director/CEO of Africa Re, Dr. Corneille Karekezi, said the results reflect resilience in a challenging quarter.
“Our Q1 2026 performance demonstrates the Corporation’s resilience in a period marked by softer earned revenue, lower retrocession recoveries and volatile financial markets. While profitability moderated from a strong prior-year base, it remained within our appetite and forecast. Our underwriting fundamentals remain sound, our capital position remains robust, and our diversified business model continues to support long-term value creation. We will maintain disciplined underwriting, active portfolio optimisation and prudent investment management as we navigate the rest of the year.”

Highlights: Q1 2026 vs Q1 2025

• Profit for the quarter: US$16.0 million (Q1 2025: US$25.6 million) – 37.4%
• Reinsurance revenue: US$249.5 million (Q1 2025: US$262.1 million) – 4.8%
• Net reinsurance revenue: US$209.7 million (Q1 2025: US$216.3 million) – 3.1%
• Net reinsurance service result: US$30.7 million (Q1 2025: US$34.3 million) – 10.5%
• Net investment income: US$17.5 million (Q1 2025: US$22.0 million) – 20.3%
• Shareholders’ funds: US$1,398.0 million (FY 2025: US$1,396.3 million)
• Total assets: US$2,191.0 million (FY 2025: US$2,166.7 million)