Enterprise Insurance Company Limited’s (“EIC”) national scale GH¢ currency claims paying ability rating has been downgraded to A+ (single A plus), from AA- (double A minus).
Whilst EIC has displayed an international solvency margin well above industry norms throughout the review period, solvency is forecast to reduce sharply to 93% in F11 (following a substantial dividend payment to Enterprise Group Limited), which underpins the current rating. Note was also taken of EIC’s favourable position as one of the leading non-life insurers operating in Ghana. However, the company’s market share of late has come under threat, given the stronger rates of growth evidenced by its competitors. In F10, the investment portfolio was heavily weighted to listed equities (at a significant 71% of total capital), presenting a high degree of investment risk. This exposure is, however, expected to be eliminated going forward, as the insurer offloads these investments to EGL, with liquidity measures projected to strengthen. Cognisance was also taken of the fact that the insurer’s underwriting results have been eroded over recent years by its rising cost base (an industry-wide challenge). Further, notwithstanding the improvement displayed in F10, EIC’s relative claims experience continues to trend above that of the industry average.
Sheri Few https://globalratings.net/uploads/files/November_2011.pdf
CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.
These cookies are necessary for the website to function and cannot be switched off in our systems. They are normally set in response to actions made by you, amounting to a request for services, such as setting your privacy preferences, logging-in or completing forms. You can set your browser to block or alert you about these cookies, but please note that parts of the website may no longer function correctly. Note: These cookies do not store any personally identifiable information.
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors navigate the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies, the site will not be performance optimised for your use.