West Africa captive creation to be studied
The West African Development Bank BOAD and Africa Specialty Risks (ASR) have signed a new partnership to conduct a feasibility study on the creation of an insurance captive. Under this agreement, ASR will act as a service provider, leveraging its expertise to support BOAD in setting up and managing the captive.
In a statement the two companies said that this collaboration reflects the commitment of both organisations to strengthen risk management practices and stimulate sustainable economic development in West Africa.
By adopting the “originate to distribute” approach, BOAD said it is currently leveraging the credit risk insurance market to optimise its capital allocation, increase its operational capacity and improve both the quality of its portfolio and its risk profile. Exploring a captive insurance company represents the next evolution of BOAD’s strategy, allowing the Bank to have increased control, enhanced financial flexibility and greater resilience in managing the risks associated with its development projects.
The establishment of a captive would allow the Bank to retain and manage certain specific risks, thus promoting a more efficient use of capital and increased support for priority projects in UEMOA member states, the companies claimed.
Serge Ekué (pictured), President of BOAD, said: “This feasibility study represents a major step forward in strengthening risk management and financial resilience in West Africa. BOAD is firmly committed to using the credit insurance market to better manage its financial risks and increase its capacity to promote sustainable economic growth.”
Mikir Shah, chief executive of ASR, said: “Our partnership with BOAD is a testament to ASR’s expertise and our commitment to being a leading provider of captive solutions for institutions that drive economic progress in Africa. We are proud to support BOAD in its strategic objectives and contribute to a more resilient and prosperous future for West Africa.”
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