By Frederick Philander WINDHOEK Despite a rather subdued growth in gross premium over the past financial year, The Namibia Reinsurance Corporation Limited late last week paid a dividend of N$1ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 150ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 366 to its only shareholder, the Namibian Government. Handing over the cheque, the chairperson of the board of directors, Maria Dax, announced that the parastatal had earned a net profit of N$6ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 089 million during the last financial year. The company has been operating for the past seven years. “I am glad to report that the corporation continued to provide reinsurance cover to Namibian insurance companies as part of its mandate, thereby creating a sustainable local retention capacity in the local insurance industry. The company has registered a minimal growth because our cessions from insurers reached the maximum levels of participation. We, however, continue to explore further growth opportunities, which will include the underwriting of foreign-based reinsurance risks and some niche markets such as medical and health reinsurance,” Maria Dax said at a press briefing. She referred to the devastating floods in the country which caused huge losses to the insurance industry. “The Mariental floods alone cost the industry in excess of N$90-million. Our exposures in these losses were also exorbitant but, due to our retrocession protection, our ultimate net loss was curbed. “Furthermore, losses due to motor claims also had a negative impact on our profitability, with such loss ratio deteriorating during the year under review. These results were felt industry-wide, and remain a concern,” she said. According to her, the Namibia Reinsurance Corporation Limited company’s profit levels were also affected, leading to a further fall in profits. “Our return on equity fell from 23.21% to 16.04%. In line with our underwriting policy, we maintained a high retention level of the risks we underwrite. This strategy would help us to retain more risks within Namibia and would also assist us to grow our shareholders funds, which is a key element in our solvency calculations. “We maintain our emphasis on achieving our corporate objectives, and the board and management remain dedicated to adding value to our clients and shareholders,” she said of the company that was rated AA by Global Credit Rating in Johannesburg on a national level and BB internationally during the ensuing financial year. “The BB-international rating is indicative of moderate claims paying ability by NamRe where the ability of these organizations to discharge obligations is considered moderate and thereby not well safeguarded in the event of adverse changes in economic and/or underwriting conditions,” Dax said of the company, which does business with some of the biggest companies in Europe and Africa. At the same occasion, the minister of Finance, in receiving the cheque on behalf of the government, praised the company for performing exceptionally well in the insurance market. “Taking into account that I as Minister of Finance am constantly looking for additional funding, this dividend payout to the government by NamRe is to be welcomed. This gesture indicates to me that the company operates profitably, an important element for the economic growth of the country,” said Minister of Finance, Saraa Kuugongelwa-Amadhila. She expressed her ministry’s delight that insurance savings are no more paid out to South African companies. “In the past, we have suffered a lot because of savings being sent to South Africa and other countries. With NamRe now locally managing those savings, growth is ensured. However, I am under no illusion that NamRe has to overcome many challenges within the insurance industry. The rating of the company’s operations by outsiders is very encouraging to help vindicate the Namibian government, and it helps the authorities to build a sound macro-economic system in the country,” the minister concluded.