AM Best Affirms Credit Ratings of Kenya Reinsurance Corporation Limited
2024年8月19日 - 11:39PM
ビジネスワイヤ(英語)
AM Best has affirmed the Financial Strength Rating of B
(Fair) and the Long-Term Issuer Credit Rating of “bb+” (Fair) of
Kenya Reinsurance Corporation Limited (Kenya Re) (Kenya). The
outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Kenya Re’s balance sheet strength, which AM
Best assesses as very strong, as well as its adequate operating
performance, neutral business profile and weak enterprise risk
management.
Kenya Re’s balance sheet strength assessment is underpinned by
its risk-adjusted capitalisation at the strongest level, as
measured by Best’s Capital Adequacy Ratio, which benefits from the
company’s low underwriting leverage. A key driver of capital
consumption is Kenya Re’s exposure to illiquid investments, such as
private equity and real estate, which together account for
approximately one-third of its investment portfolio. The balance
sheet strength assessment also considers Kenya Re’s exposure to the
very high levels of economic, political and financial system risks
that are associated with its core markets, as well as the company’s
history of severe reserve deficiencies relating to its crop
business, the majority of which was exited in 2020. Since then,
reserving development has demonstrated a stabilising trend.
AM Best views Kenya Re’s operating performance as adequate,
considering its return-on-equity ratio has consistently exceeded
the generally high inflation level in Kenya in recent years. Since
initiating corrective actions in 2020, the company's non-life
portfolio has reported modest technical profits in most years.
Nonetheless, overall earnings remain driven by favourable
investment income reflecting the high interest rates prevalent in
Kenya, in response to the inflationary environment.
Kenya Re operates as a composite reinsurer primarily across
Africa, with a focus on markets in East Africa. The company has
privileged market access in Kenya, where it benefits from a 20%
compulsory cession from domestic insurers. Kenya Re’s risk
management framework is considered to be evolving and its risk
management capabilities are weak when compared with its risk
profile. However, ongoing developments in the company’s risk
management framework and processes are expected to gradually
strengthen its risk management capabilities.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best’s Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Naz Botea, ACA Financial Analyst +44 20 7397
0313 naz.botea@ambest.com Christopher Sharkey
Associate Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Kanika Thukral Associate
Director, Analytics +44 20 7397 0327
kanika.thukral@ambest.com Al Slavin Senior Public
Relations Specialist +1 908 882 2318
al.slavin@ambest.com