Announcements

Alliance’s A+ rating reaffirmed

GCR has maintained Alliance Insurance Corporation Limited’s (“Alliance”) domestic TShs currency claims paying ability rating of A+ (single A plus).

In according the rating, cognisance was taken of the fact that international solvency has consistently increased since F06, amounting to approximately 80% as at 1H F10. Furthermore, while statutory coverage in the general business was maintained at 1.5x in F09, capital raising is expected to support an increase in coverage going forward (with 2.4x cover achieved at 1H F10). Alliance also comfortably complies with the regulatory minimum in the life business. In addition, the insurer displays a conservative investment stance, supportive of comfortable liquidity measures.

From an industry wide perspective, cognisance was taken of the prevalence of facultative placements with counterparties that are unrated or have lower credit ratings, thereby exposing cedents to significant credit risk. Furthermore, in light of the number of new entrants into the market and relatively subdued corporate expansion, competition is likely to intensify in the short to medium term. This is expected to place downward pressure on industry margins.

Alliance commenced operations in 1999 and, following consistent GWP growth, has established itself as the 2nd largest insurance company in Tanzania.

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