Assurances Reassurance Omnibranches (ARO) is a composite insurer and a reinsurer that has been operating since 1935. The company started out as a general agency of the French insurer, La Préservatrice. Following the nationalisation of the insurance market in 1974, the entity was renamed to Préservatrice Madagascar. It was granted monopoly of local insurance and reinsurance activities in 1975 and rebranded a year later to ARO.
ARO is a composite insurer and reinsurer that has been operating since 1935. The company started out as a general agency of the French insurer, La Préservatrice. Following the nationalisation of the insurance market in 1974, the entity was renamed to Préservatrice Madagascar. It was granted monopoly of local insurance and reinsurance activities in 1975, and rebranded a year later to ARO.
The majority shareholder in ARO is the Malagasy government, controlling 73% stake as at end of 2020, with remaining shareholding interests distributed among the Staff Incentive Trust (17%), and local institutional and individual investors (10%). ARO is a member of the Globus Network, a pan-African web of insurance companies from which the insurer notably benefits from revenue support, through access to the network’s clients.
The underwriter is not part of a group, with its various business units (general insurance, life assurance & acceptance business) operating under one license. Therefore, the below analysis follows a stand-alone analytical approach, based on company accounts consolidating all insurance and reinsurance activities.
Madagascar is an island country located in the Indian ocean off the coast of southern Africa and is the fifth largest island in the world with a population of 29m. The country is one of the African countries most severely affected by climate change and experiences an average of three cyclones per year. According to the World Bank, around 81% of the population lives below the international poverty line of USD1.90 per day, a new high on the back of the COVID-19 pandemic. Despite having considerable natural resources (graphite, chromite, coal, bauxite, rare earth elements, salt, quartz, tar sands, semiprecious stones, mica, fish and hydropower) these are largely untapped, and Madagascar has among the highest poverty rates in the world. Agriculture, including fishing and forestry, is a mainstay of the economy, accounting for more than one-fourth of GDP and employing c.80% of the population. Madagascar produces 80% of the world’s vanilla beans and its reliance on the commodity for most of its foreign exchange is a significant source of vulnerability.