A.M Best affirms Wapic Insurance Plc ratings in sign of strength

A.M Best has affirmed the financial strength rating of B- (Fair) and the issuer credit rating of “bb-“ of Wapic Insurance Plc (Wapic Nigeria), the operating holding company of the Wapic group of companies.

The outlook for both ratings is stable.

“The ratings of Wapic reflect its developing business profile in the Nigerian insurance market and its solid risk-adjusted capitalisation,” A.M Best said.

Wapic is an insurance group that has been operating under new management since 2013, following its divestment by Access Bank. Wapic is a domestic non-life entity that wholly owns a life insurer in Nigeria and a non-life insurer in Ghana.

The group reported consolidated gross written premiums of N5 billion (c. $25 million) in 2014.

Under Wapic’s new business strategy, the group seeks to strengthen its competitive position by developing its profile within the corporate segment of the market and increasing its underwriting of compulsory lines resulting in planned growth of 25 percent per annum for the medium term.

The firm appears to be meeting growth targets despite the challenging Nigerian macro environment.

For the first nine months through September 2015, Wapic’s Group Gross premium written increased by 21.7 percent to N5.672 billion from N4.66 billion in 2014. Gross premium come moved by 24.28 percent to N4.38 billion.

Wapic’s underwriting profits also increased by 21.6 percent to N1.3 billion in the 9 months period to September 2015 from N1.08 billion in the earlier period.

“The successful execution of Wapic’s strategy is largely dependent on the group enhancing its presence in the highly competitive markets of Nigeria and Ghana,” A.M Best said.

For 2015, Wapic is expected to produce a combined ratio in excess of 100 percent, lower than the 137 percent reported in 2014.

A.M Best expects Wapic’s risk-adjusted capitalisation to be pointmaintained at a solid level, based on its performance forecasts and a policy of full earnings retention.

Wapic’s balance sheet strength is supported by a conservative investment portfolio consisting mainly of cash deposits and fixed income investments and a panel of predominantly highly rated reinsurers.

A.M Best – Europe Rating Services Limited (AMBERS) is an External Credit Assessment institution (ECAI) in the European Union (EU). Therefore credit ratings issued by AMBERS may be used for regulatory purposes.

Wapic Insurance total assets increased by 8.43 percent to N23.91 billion in 2015 from N22.05 billion in 2014, while total equity moved by 5.14 percent to N14.93 billion in the most recent period as against N14.20 billion last year.

Wapic share price closed at N0.50 on the floor of the exchange yesterday while market capitalisation stood at N6.691 billion.