• Monday, June 17, 2024
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BusinessDay

Africa Re financial ratings upgraded to ‘A’ after 13-years

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The financial strength and issuer credit ratings of African Reinsurance Corporation (Africa Re) which was  recently upgraded to full ‘A’ (Excellent)) and ‘a’ from ‘A-‘ (Excellent) and ‘a-‘ respectively by A.M. Best, coming after 13 years has continued to attract attention of stakeholders. The outlook for both rating according to AM Best is stable. The upgrade reflects Africa Re’s strength and stability and demonstrates its ongoing ability to provide reliable protection to its clients. This is the highest rating ever conferred on any African (Re) Insurance institution by A.M. Best.

Prior to financial year 2014, A.M. Best had rated Africa Re financial strength and issuer credit since 2003as ‘A-‘ (Excellent) and ‘a’ respectively with both ratings having stable outlook. The Corporation showed resilience in the face of turbulent financial headwinds, which caused severe shocks in the industry. Such shocks include the global financial crises, political turmoil in MENA, war in Côte d’IvoireIvory Coast, Egyptian Crises, South African labor unrest amongst others. Despite these external influences on the insurance industry, Africa Re ratings were continually sustained year-on-year.

In 2014, A.M. Best revised the outlook of the Corporation’s ratings to positive to demonstrate its continually improving technical results, risk-adjusted capitalization, financial flexibility, excellent liquidity, market competitiveness, indices, deep market knowledge, geographical diversification, very good management and strong governance, liquidity and deep market knowledge.

The Company’s Group Managing Director, Corneille Karekezi, speaking on the development said Africa Re is committed to the provision of strong and reliable risk protection to its clients, hence its focus is mainly on its stability, profitability and ongoing existence. To achieve this, the Corporation while deepening its penetration using its product lines also extended its reach across geographical boundaries thus creating a well-balanced and diversified portfolio.

“This strategy was supported by strong governance, deeper R&D hence promoting informed and calculating risk taking, enhanced risk management & controls, stable investments, efficient internal controls, strategic partnership and knowledgeable and experienced personnel.”

On impact of ppgrade on Africa Re, karekezi said “ The financial strength and issuer credit ratings conferred on an organization reflects its current and foreseeable future ability to continue to meets its financial obligations to its clients. Hence a strong rating will ensure that an organization is included in a pool of strong securities in its industry and reliable business partners.”

“The ratings upgrade is expected to increase focus on Africa Re as a choice partner in the provision of insurance risk services. (Re)Insurance institutions who continually seek strong and reliable business partnership, technical knowledge and quality credit/counterparty portfolio will now turn to Africa Re for support than ever before.”

“Hence, business volume is expected to increase in the near future and Africa Re’s choice will widen since the range of offered business will grow. Africa Re is well poised to strategically partner with its clients whilst ensuring it maintains financial and technical reliability.”

On what takeholders’ of the Company should expect, he said “Expectations as a Risk Provider, Business Partner & Enabler – Africa Re is more than ever better able to provide reliable risk service to Insurance and Reinsurance Institutions across Africa.

“As a business partner, the Corporation will provide very strong security and top-notch risk solutions to business problems thus enabling organizations to focus on their core activities. Also, for organizations seeking quality credit/counterparty portfolio can now select Africa Re.”

“Expectations as a Developmental Institution and Investment Vehicle – Africa Re’s founders and investors are now more confident in the Corporation’s ability to fulfil its underlying developmental missions across the African continent. For the first time, an African P&C insurance organization receives an ‘A’ rating and ranks amongst the best globally.”

Also as an investment vehicle, the Corporation’s investors can continually meet and exceed their risk and financial objectives, Karekezi promised.

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