June 24 (Bloomberg) -- Africa Reinsurance Corp., the state- owned company that underwrites risk for other insurers on the continent, said its credit-rating upgrade will help fuel the company’s expansion.

Standard & Poor’s raised the company’s rating to A- from BBB+ to reflect the “continued stable earnings and the strong regional competitive position” of AfricaRe, according to a statement issued by the New York-based agency yesterday.

“It shows we’re secure enough to write the business of any company be it national or international,” AfricaRe Chief Executive Officer Bakary Kamara said in an interview yesterday in Abuja, the Nigerian capital. “That certainly will open more doors.”

Formed in 1976 by the African Development Bank, AfricaRe currently has an 8 percent share of the reinsurance market on the continent that Kamara said is valued at $5 billion. The company’s shareholders include the governments of 41 African countries as well as five development finance institutions such as the International Finance Corp.

Reinsurers assume parts of insurers’ liabilities in return for a share of their premiums.

As part of its expansion plans, AfricaRe plans to focus more on crude-producing African countries from Angola to Mauritania in order to increase premiums generated from the oil and gas business, Kamara said. Plans by the U.S. to increase its oil imports from Africa “will generate business opportunities for AfricaRe,” he said.

Nigeria Opportunities

Opportunities for growth also exist in Nigeria, Africa’s top crude producer, where oil and gas companies are required by law to use local insurers to cover at least 40 percent of their risks, he said.

In addition, AfricaRe will start an Islamic insurance subsidiary, to be known as AfricaRe Takaful, “very soon” to cater for demand because of the appetite for Islamic insurance in African Muslim states, said Kamara. The company will be based in Africa or in the Middle East, where the Islamic-finance business is growing, he said.

AfricaRe’s other shareholders include Deutsche Investitions und Entwicklungsgesellschaft, the Netherlands Development Finance Corp. and Proparco of France.

The company is rated A- by Oldwick, New Jersey-based AM Best Co., according to AfricaRe’s Web site.

To contact the reporter on this story: Paul Okolo in Abuja pokolo@bloomberg.net.

Last Updated: June 24, 2009 09:24 EDT