Shareholders reinvest Sh810m dividend in ATI – Business Daily
African Trade Insurance Agency (ATI) chairman Dr Yohannes Birru. PHOTO | DIANA NGILA | NMG
Shareholders of Nairobi-based African Trade Insurance Agency (ATI) including the Kenyan government reinvested $6.8 million (Sh810 million) worth of dividends they were to receive from the company in the year ended December.
The move raised their ownership and helped shore up the capital of the agency which offers guarantees fulfilments of contracts, credit, and political risk insurance.
The dividend reinvested more than tripled from $2 million (Sh238 million) in 2020.
“Our class A and B shareholders have committed to reinvesting their dividends for five years starting 2020. This is a very positive gesture that speaks to the highest level of confidence that the shareholders have in ATI,” the insurer says in its latest annual report.
“The capitalisation of dividends has helped fund our capital growth thereby enabling us to write more business and to sustain our high growth with our exposures having tripled in the last five years to $6.6 billion (Sh787 billion).”
The agency’s capital increased 25.6 percent to $516 million (Sh61.5 billion) in the review period, reflecting the impact of the reinvested dividends and funds raised from the sale of shares to new member countries.
Kenya reinvested dividends worth $600,000 (Sh71.5 million) in the year under review, a move that raised its shares in ATI to 292 from 286 in 2020.
Kenya is the single largest shareholder in the insurer which different classes of investors including states, private companies, and international development institutions like the African Development Bank (AfDB).
Nairobi-based Kenya Re has 10 shares in the agency, ranking among the minority investors.
ATI declared a dividend of $8.72 million (Sh1 billion) last year, down from $9.86 million (Sh1.1 billion) in 2020. Most of the dividends have been reinvested into the agency.
The insurer draws most of its business from the countries which are its shareholders including Kenya. The agency raised its exposure to risks in the Kenyan market by Sh1.9 billion last year, halting a two-year decline that had been informed by a need to diversify its geographical portfolio.
The agency says Kenyan exposure stood at $720.37 million (Sh85.7 billion) at the end of 2021, up from $704.4 million (Sh83.8 billion) in 2020.
ATI had made reductions in local exposure starting in 2019 and 2020 by a cumulative Sh14.7 billion, with the partial reversal of this portfolio redistribution last year an indicator of potentially rising demand for cover ahead of the 2022 election year in the country.
ATI supports trade and investment in African member states by providing comprehensive hedging solutions and offering covers against political and credit risks.
By the end of last year, the agency had increased its membership to 20, after Cameroon and Senegal joined as shareholders.
The insurer’s products include protections against various political risks including wars, seizure of an asset by the government, defaults, or changes in laws.