East Africa Reinsurance’s B score affirmed by AM Greatest

AM Greatest has affirmed the monetary energy score of B (Truthful) and the long-term issuer credit standing of “bb+” (Truthful) for East Africa Reinsurance Firm Restricted (EARe), based mostly in Kenya. The outlook for each rankings is steady.

The rankings are based mostly on EARe’s stability sheet energy, which AM Greatest classifies as very sturdy. The rankings additionally consider the corporate’s sufficient working efficiency, restricted enterprise profile, and marginal enterprise danger administration.

The corporate additionally advantages from low underwriting leverage. Nonetheless, the rankings consider EARe’s publicity to elevated financial, political, and monetary dangers in Kenya, the place most of its property are concentrated. In response to the latest deterioration within the credit score high quality of Kenya’s authorities debt, the corporate is implementing actions to de-risk its funding portfolio.

EARe has a historical past of sufficient working efficiency, with return-on-equity outpacing inflation in Kenya over the previous 5 years. Prudent underwriting has contributed to improved technical efficiency, with a internet/internet mixed ratio of 94.1% for 2023, representing a 4.5 proportion level enchancment from 2022, in line with AM Greatest.

Total earnings proceed to profit from sturdy funding earnings, pushed by the excessive rates of interest in Kenya.

With insurance coverage service income of $33 million in 2023, EARe is taken into account a small reinsurer on a worldwide scale. The corporate operates in additional than 30 nations throughout Africa and Asia, with the majority of its premium earnings coming from East African markets.

In different latest rankings developments, AM Greatest has additionally affirmed the monetary energy score of A- (Wonderful) and the long-term issuer credit standing of “a-” (Wonderful) for Stonefort Reinsurance SA, a Luxembourg-based subsidiary of HOCHTIEF Aktiengesellschaft.

HOCHTIEF, a significant building agency headquartered in Germany, is majority owned by ACS, Actividades de Construcción y Servicios, SA. The outlook for these credit score rankings stays steady.

Stonefort Reinsurance has maintained a robust and steady working efficiency through the years, primarily on account of stable underwriting outcomes. From 2019 to 2023, the corporate achieved a five-year weighted common mixed ratio of 79.4%, as calculated by AM Greatest.

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