Following a recommendation by the African Development Bank (AfDB), the African Reinsurance Corporation (AFRICA RE) was established on 24th February 1976 by the signing in Yaoundé, Cameroon, of an international Agreement by the Plenipotentiaries of 36 member States of the Organization of African Unity (OAU) and the said Bank with the aim of reducing the outflow of foreign exchange from the continent by retaining a substantial proportion of the reinsurance premiums generated therein.
That Agreement, known and referred to as the Agreement Establishing the African Reinsurance Corporation confers on AFRICA RE its current status as well as the legal authority to operate. As at today, AFRICA RE has a membership of 41 member States representing 38.75 % (end 2010) of the capital in addition to the AfDB, which is among the single largest shareholders with 8% (end 2010) of the capital.
The Agreement also empowers any member State to authorize a national institution, either a bank or an insurance company, acting on its behalf, to purchase the shares reserved for the State. In order to allow its cedants to share the Corporation's fortune and participate more closely in its affairs, one-third of AFRICA RE's capital was opened up in 1992 to insurance companies with a majority indigenous shareholding.
A good number of the companies have already subscribed and paid up for the shares allotted to them. To date, more than 100 insurance and reinsurance companies are shareholders of AFRICA RE with a 32.25 % (end 2010) combined stake.
Also, in 2001 it was decided that the Corporation's capital be increased to US$ 100 million and opened to non-African investors so as to have the required strategic partners. As a result, four (4) non-african Development Finance Institutions (DFIs) subscribed and paid for a total of 21% (end 2010) of the capital of Africa Re, bringing the number of AAA rated shareholders to Five (5) and accounting for 29% of the corporation's shareholding. The five DFIs are to date the:
- IFC (International Finance Corporation, a branch of the World Bank),
- DEG (German Development Finance Institution, member of the KfW Banking Group),
- FMO (Entrepreneurial Development Bank of the Netherlands),
- PROPARCO (French Financial Development Institution, member of the Groupe Agence Française de Développement).
In line with the decision to allow companies and non-African DFIs to participate in the Corporation's capital, it was decided that the Board of Directors be enlarged to allow representatives of insurance / reinsurance companies and DFIs to occupy majority of seats therein.
AFRICA RE called in 2010 the 4th Capital Increase to bring its paid-up capital to US$ 300 m and its shareholders funds to US$ 600 m by end of 2012.