ICEA LION General Insurance Company Limited (Jul 2022)

ICEA LION Insurance Holdings Limited is an investment holding company established in 2020, with interests in insurance and asset management businesses in Kenya, Uganda and Tanzania. The group is owned by First Chartered Securities (“FCS”) with a majority stake of 75.9%. FCS is in turn wholly owned by the ultimate parent company, Asset Managers Limited. The remaining shareholding is held by Eastern Africa Holdings Limited, an entity incorporated in the United Kingdom and fully-owned by Leapfrog Strategic African Investments.

Subsidiaries housed and consolidated under the group include ICEA LION General (together with its subsidiary; ICEA LION General Insurance Company (Tanzania) Limited), ICEA LION Life Assurance Company Limited (encompassing Ugandan subsidiaries; ICEA LION Life Assurance Company (Uganda) Limited, ICEA LION General Insurance Company (Uganda) Limited, and ICEA LION Asset Management (Uganda) Limited), ICEA LION Asset Management Limited and ICEA LION Trust Company Limited.

ICEA LION Holdings is the majority shareholder (with an 80% stake) and nearest consolidating parent of ICEA LION General. The subgroup is considered a core entity of the group, accounting for 44% of gross written premiums in FY21, a contribution with potential improvement to c. 50% if the pending reorganisation involving the planned transfer of ICEA LION General Insurance Company (Uganda) Limited to the subgroup is successfully concluded. Considering the materiality of the subgroup’s contribution to the group’s top line, the analytical method followed for the purpose of determining ICEA LION General’s rating is a group approach, with the insurer’s credit strength equalised to that of ICEA LION Holdings.

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ICEA LION Life Assurance Company Limited (Jul 2022)

ICEA LION Holdings is an investment holding company established in 2020, with interests in insurance and asset management businesses in Kenya, Uganda and Tanzania. The group is owned by First Chartered Securities (“FCS”) with a majority stake of 75.9%. FCS is in turn wholly owned by the ultimate parent company, Asset Managers Limited. The remaining shareholding is held by Eastern Africa Holdings Limited, an entity incorporated in the United Kingdom and fully-owned by Leapfrog Strategic African Investments.

Subsidiaries housed and consolidated under the group include ICEA LION Life, encompassing its Ugandan subsidiaries (ICEA LION Life Assurance Company (Uganda) Limited, ICEA LION General Insurance Company (Uganda) Limited, and ICEA LION Asset Management (Uganda) Limited), ICEA LION General Insurance Company Limited, together with its subsidiary (ICEA LION General Insurance Company (Tanzania) Limited), ICEA LION Asset Management Limited and ICEA LION Trust Company Limited.

ICEA LION Life is a wholly owned subsidiary of ICEA LION Holdings which is also the underwriter’s nearest consolidating entity. Within the ICEA LION Holdings structure, the subgroup is a core contributor (above 50%) to group revenues, assets, liabilities and profitability, which are important factors shaping the credit profile of group. Considering the materiality of the subgroup’s contribution to the group’s credit fundamentals, the analytical method followed for the purpose of determining ICEA LION Life’s rating is a group approach, with the insurer’s credit strength equalised to that of ICEA LION Holdings group.

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Uganda Reinsurance Company Limited (Jul 2022)

Uganda Re was incorporated in November 2000 and commenced operations in 2013. The company is the only locally licenced reinsurer in Uganda and benefits from 15% mandatory cessions on all treaty reinsurance business in Uganda. The mandatory cessions are provided for by the Insurance Act of Uganda caption 213, the Insurance (Amendment) Act No. 13 of 2011 and Regulations of the Insurance Regulatory Authority. The company’s major shareholders are Zep Re (PTA Reinsurance Company) (21%), Kenya Reinsurance Corporation (11%), UAP Insurance Company Limited (9%), Uganda Insurers Association (8%), Continental Reinsurance Company Plc (5%). Overall, 49.1% of the company’s shareholding is held by local insurance players while 44% is held by regional (re)insurers and the balance by individuals (1.5%) and brokers (5.6%). Since Uganda Re is not part of a group, the credit profile is based on stand-alone fundamentals.

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Jubilee Allianz General Company Limited (Jul 2022)

Jubilee Allianz Uganda is a subsidiary of Allianz Africa Holding GmbH (“Allianz Africa”), an intermediate non-operating holding company of Germany headquartered Allianz SE (“Allianz” or “the group”) following the strategic transaction with Jubilee Holdings Limited that consummated in October 2021. Under the transaction, Allianz Africa acquired 66% of the company’s shareholding, with a 34% shareholding remaining under Jubilee Holdings Limited (“Jubilee group”) through The Jubilee Investment Company Limited. The continued shareholding by the Jubilee group is structured to ensure a long-term partnership between the transacting parties. In this respect, no material changes in business relationships and processes are expected from the change of ownership, with a transitional period of two years from the date of transaction having been cut out to ensure a well-managed integration into the Allianz ecosystem. However, this could take longer than planned due to high assimilation levels of the insurer to the Jubilee group.

Over the medium to longer term, we expect Jubilee Allianz Uganda to stabilise relationships within the vast business network and franchise built by the Jubilee group and its parent the Aga Khan Development Network in East Africa and combine these strengths with the global hegemony of Allianz in offering world class insurance solutions. Nonetheless, the transition period poses risk with regards to market repositioning in Uganda that could erode envisaged brand synergies.

Given that Allianz has gross premiums of EUR147bn, Jubilee Allianz Uganda is a small entity within the group, contributing less than 1% of gross premiums at a scale of less than EUR25m in FY21. We have, therefore, assessed the credit profile of the insurer on a stand-alone basis.

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Tropical Reinsurance Company Limited (Jul 2022)

Tropical Re was formed in 2007 as a reinsurer domiciled in Zimbabwe. The reinsurer is a subsidiary of Nzou Holdings Limited (“the group”), which owns 100% of shares through investment companies; TN Investments (50%) and Taquila Trading (50%). The group has other subsidiaries, which include Alliance Insurance Company Limited (100%), Alliance Health Limited (100%), Hunt Adams Insurance Brokers and Ashleen Investments Limited (a micro-finance company). Furthermore, the group owns 100% shareholding in Africa Pride Investments; a short-term insurance company domiciled in Zambia. The group does not consolidate the subsidiaries, although Tropical Re evidences high premium reliance on Alliance Insurance Company Limited (“Alliance Zimbabwe”) and to a degree Africa Pride Investments (“Africa Pride”). In addition to business support, the group provided capital support to Tropical Re in 2017, following an elevated operating loss that reduced capital. While Alliance Zimbabwe is the largest group subsidiary, Tropical Re is the only reinsurance subsidiary, underpinning its strategic importance.

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Swan General Ltd (Jul 2022)

Swan General ("Swan") began operations in 1955, following the merger of The Mauritius Fire Insurance Company Limited (established in 1854) and The Colonial Fire Insurance Company Limited (established in 1871).

The company listed on the SEM in 1990. Currently, 75.4% of shares are held by three conglomerates. 24.6% of shares are in free float. The remaining 75.4% are indirectly held by three large conglomerates, which are all individually listed on the SEM, and have diversified business interests relating to resources, logistics, investments and services.

Swan General has twelve subsidiaries, notably Swan Life Limited (“Swan Life”), Swan Special Risks Company Limited, Swan General Insurance Company Zambia and Swan Reinsurance PCC. Swan Life is the core subsidiary of Swan General, contributing about 59.5% and 89.7% to group revenue and total assets, respectively.

The analytical approach has remained the same from prior years. As Swan General Limited is operationally critical to the wider group, the analytical approach is a group approach: that is an analysis on Swan General Limited and its subsidiaries (including Swan Life), referred to as (“the group” or “Swan Group”).

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Bankmed (Jul 2022)

Bankmed was established as a restricted medical scheme in 1914, with the aim of servicing the banking and financial services sector (specifically those entities with a banking licence). The scheme provides healthcare funding to more than 30 financial institution groups operating in South Africa, including three of the four largest banking groups. The scheme is administered by Discovery Health (Pty) Ltd.

Bankmed focuses on balancing affordability with reserve utilisation, aiming to grow the membership base without adversely impacting the scheme’s financial sustainability. This is accompanied by claims control measures through tariff negotiation and efforts to contain over-utilisation. The scheme continues to tweak product offerings and limits to enhance attractiveness, especially aiming at targeting new young members. At the same time, emphasis is placed on achieving a balance between low contribution increases and stability in the financial profile. In this regard, Bankmed has maintained a very strong solvency margin and broadly positive operational cash flow generation, which are expected to provide sufficient buffers to absorb a likely uptick in claims frequency over the next 12 to 18 months.

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CIC Life Assurance Limited (Jul 2022)

Founded in 2011 following de-consolidation of the Cooperative Insurance Company Limited’s short and long term business units, CIC Life Assurance Limited is a wholly owned subsidiary of CIC Insurance Group Plc, a large insurance and investment company with footprints in Kenya, South Sudan, Uganda and Malawi. The Cooperative Insurance Company Limited is the largest shareholder in the group, with a stake of 74.3% at FY21.

CIC Life constituted c. 31% and 44% of the group’s gross written premiums and total assets at FY21, respectively. Consistent with GCR’s group ratings approach, the analytical approach followed is a stand-alone with considerations for a group cap.

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AIG Kenya Insurance Company Limited (Jul 2022)

AIG Kenya (formerly Chartis Kenya) is a privately owned company licensed by the Insurance Regulatory Authority of Kenya to underwrite all classes short term insurance business, except medical and micro insurance, since 1972. The insurer is a subsidiary of AIG MEA limited (“the group”) which has a 66.7% stake in the entity while the balance is held by NCBA Bank Limited, a commercial bank based in Kenya. The group is a network of property casualties, operating within Africa and the Middle East.

The analytical approach applied was a standalone analysis with considerations on the group cap/support dependent on the group’s credit profile strength.

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CIC General Insurance Limited (Jul 2022)

CIC General is an insurance company licenced in Kenya to underwrite all classes of the short-term business since 1978. The entity is the flagship company of its immediate parent, CIC Insurance Group Plc, a listed entity on the Nairobi Securities Exchange, contributing about 58% and 32% of the group’s premiums and assets at FY21, respectively. CIC group houses six subsidiaries operating in four countries, with minority stake in select subsidiaries being held by Cooperative bank of South Sudan (South Sudan subsidiary), MUSSCO and Farmers union of Malawi (subsidiary in Malawi).

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