African insurers get boost from rating agencies

It has upgraded the financial strength rating to B+ (Good) from B (Fair) and the issuer credit rating to BBB- from BB+ of AXA Mansard Insurance (Nigeria), the majority-owned subsidiary of AXA. The ratings have been removed from under review with developing implications and assigned a positive outlook. The upgrade of AXA Mansard’s ratings reflects the company’s strategic importance to AXA, says AM Best, through its access to the largest economy in Africa, where the company benefits from a strong competitive position, particularly within the market’s retail segment. Additionally, AM Best said it expects “AXA Mansard to benefit from the alignment of its risk management capabilities to that of its majority shareholder, allowing the company to share in the expertise and utilise the risk mitigating practices of the group”. The agency added: “The positive outlook reflects AXA Mansard’s consistently excellent underwriting performance, as demonstrated by the five-year average non-life combined ratio of 83%. Technical results have been maintained despite the company’s rapid growth in recent years and the impact of the increasingly competitive conditions on pricing.hideAM Best has also revised the outlook for the Issuer Credit Rating (ICR) to positive from stable and affirmed the Financial Strength Rating (FSR) of B (Fair) and the ICR of BB for Custodian and Allied Insurance Limited (CAI) (Nigeria). The outlook for the FSR remains stable. CAI is the wholly-owned non-life subsidiary of Custodian and Allied Plc. It said: “The positive outlook reflects CAI’s strong risk-adjusted capitalisation, enhanced business profile and strengthened risk management. The ratings also consider the company’s solid technical performance. A partly offsetting rating factor relates to the weakened economic conditions in Nigeria and the impact on the domestic insurance sector’s increasingly challenging operating environment.” Meanwhile, AM Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of BBB- of ZEP-RE (PTA Reinsurance Company) (ZEP Re) (Kenya). The outlook for both ratings is stable. The agency said: “The ratings reflect ZEP Re’s excellent risk-adjusted capitalisation and resilient underwriting profitability. Further positive rating drivers include the company’s well-established competitive position within its regional reinsurance market and positive developments in its enterprise risk management framework. Partially offsetting rating factors include the ongoing challenges related to the current conditions in the reinsurance market and the entity’s exposure to the volatile business environment in Kenya.” It added: “Going forward, AM Best expects the company to continue to grow its franchise, maintaining its strict underwriting guidelines and moderate appetite toward new risks in new territories.” Elsewhere, Fitch Ratings has downgraded South Africa-based telecoms group MTN Group’s (MTN) long-term Issuer Default Rating to BBB- from BBB. The outlook is stable. The downgrade follows the recent rating action on South Africa’s sovereign ratings, which is considered together with the impact from recent announcements from the group regarding the fine from NCC, the Nigerian telecoms regulator. Both of these are assessed to have increased operational risk to MTN from its two key markets.

African insurers get boost from rating agencies

Want to read this article?

Read Next

Strebel to replace Gonzalez as head of Swiss Re China

Premium increases continue to slow down in US commercial P&C market

Berkshire Hathaway discloses minority $6.72bn stake in Chubb

Alternative solutions and specialty drive Scor’s Q1 growth

US commercial lines sector combined ratio increased to 96.2% in 2023

Strebel to replace Gonzalez as head of Swiss Re China

Premium increases continue to slow down in US commercial P&C market

Berkshire Hathaway discloses minority $6.72bn stake in Chubb

Alternative solutions and specialty drive Scor’s Q1 growth

US commercial lines sector combined ratio increased to 96.2% in 2023

Want to read this article?

Read Next

Strebel to replace Gonzalez as head of Swiss Re China

Premium increases continue to slow down in US commercial P&C market

Berkshire Hathaway discloses minority $6.72bn stake in Chubb

Alternative solutions and specialty drive Scor’s Q1 growth

US commercial lines sector combined ratio increased to 96.2% in 2023

Related Articles