Business News of 2014-06-25

Ghana Reinsurance company wants GH¢300m from govt

The Ghana Reinsurance Company Limited (Ghana Re) is awaiting the approval of its shareholder; government, to recapitalise the company with an additional GH¢300 million.
The need for recapitalisation, according to the board chairman of the company, Mr Lionel Molbila, was to give the company the leverage to strengthen its business activities in Ghana and beyond the African continent.
Speaking at the company’s annual general meeting in Accra on June 17, the Board Chairman explained that increasing the capital base of the company was to help it to also improve its business and sustain growth.
“We are committed to sustainable growth and are certain that with increased capacity from recapitalisation, we will boost business operations in our offices in Kenya and Cameroon and expand into other selected markets,” he said.
The company is a leading international reinsurer in Ghana principally involved in all classes of general reinsurance business and provides insurers the confidence and capability of underwriting all risks and making prompt payments of claims.
But in a swift response to the request for approval at the meeting, the Director of Public Investment at the Ministry of Finance, Mrs Magdalene Apenteng, asked the board to hold on the recapitalisation request as she had not been given the nod from higher authority to approve.
Mrs Apenteng, who represented the major shareholder, said there would be broader consultations on the recapitalisation going forward before subsequent approval, although the request, according to Mr Mobila, had been lingering on since 2011.
According to her, the Minister of Finance, Mr Seth Terkpeh, was currently not in the country and, therefore, urged the board to exercise a bit of patience as deliberations would still continue after the meeting before any approval could be given.
Financial performance
The company increased its profit by 50 per cent from GH¢20 million in 2012 to GH¢30 million in 2013.
Composite gross premium also grew by 10.27 per cent from GH¢67.8 million in 2012 to GH¢74.8 million in 2013.
Mr Molbila explained that 67 per cent of the company’s premiums was generated locally with 33 per cent coming from markets outside Ghana.
The company’s balance sheet expanded by 29.09 per cent as a result of net profit transferred and revaluation surpluses.
The increase is represented by GH¢37.8 million in cash and money market investments, as well as increases in equities and investment properties of GH¢19.5 million.