Zep-Re managing director Hope Murera. FILE PHOTO | NMG
Regional reinsurance company Zep-Re has been given a triple A
rating by rating agency Global Credit Ratings (GCR), meaning it is in
the best position to repay its long-term debt.
It is
the highest rank of creditworthiness, with the reinsurer’s rating rising
from the previous second place of AA+ that is assigned to firms with
strong balance sheets.
The company which gets up to 40
percent of its business in Kenya gets preferential treatment and tax
exemptions in its markets in the Common Market for Eastern and Southern
Africa (Comesa) regional bloc.
“Zep-Re’s credit profile
derives uplift from a fairly diversified membership base, coupled with
continued preferential treatment in the form of mandatory cessions and
tax exemptions,” GCR said.
ZEP-Re’s chief executive
Hope Murera said the ratings upgrade reflects the firm’s commitment to
drive greater insurance penetration across Africa as mandated by its
foundation by Comesa.
“We are extremely proud to have received this rating upgrade and
of the signal it sends to our stakeholders across the continent,” Ms
Murera said in a statement.
The reinsurer has a
demonstrated track record of shareholder support through capital
injections that helped it to register a five-year compound annual growth
rate of 13 percent in capital base.
GCR gave the
company a stable outlook on expectations that the reinsurer will
maintain very strong capitalisation, strong liquidity and intermediate
earnings.
Zep Re’s earnings hit a seven year low of Sh1
billion in 2018 and marked a 57.7 percent drop from Sh2.4 billon posted
the previous year.
During the review period, Zep Re
registered an underwriting deficit, driven by higher claims experience
on the back of increased frequency of medium-sized claims as well as an
increase in foreign exchange losses.
GCR expects earnings to remain exposed to market related risks, given weaknesses in target markets.
No comments :
Post a Comment