Announcements

GCR affirms Guardrisk Life Limited’s rating of AA-(ZA); withdraws rating

Johannesburg, 31 October 2014 — Global Credit Ratings has today affirmed the national scale financial strength rating assigned to Guardrisk Life Limited of AA-(ZA); with the outlook accorded as Stable. At the same time, GCR has withdrawn the rating. The withdrawal of the credit rating of Guardrisk Life Limited is at the client’s request.

SUMMARY RATING RATIONALE

Global Credit Ratings has accorded the above credit rating(s) to Guardrisk Life Limited (“Guardrisk Life”) based on the following key criteria:

Guardrisk Life is a wholly owned subsidiary of Guardrisk Group (Pty) Limited, which is in turn 100% owned by MMI Holdings Limited (“MMI”). The MMI Group carries a national scale financial strength rating of AA+(ZA) and a national scale long term rating of AA(ZA).

The rating recognises Guardrisk Life’s leading position in the cell captive assurance market, which is further underpinned by management’s high level of expertise and demonstrated track record. The company has evidenced strong growth in its premium base over the review period, supporting profit stability and internal capital generation. Guardrisk Life continued to reflect sound capitalisation levels at FYE14, with statutory CAR coverage amounting to 3.8x.

NATIONAL SCALE RATINGS HISTORY

Initial rating (Dec/2004)
Claims paying ability: A+(ZA)
Outlook: Stable

Last rating (Mar/2014)
Claims paying ability: AA-(ZA)
Outlook: Stable

ANALYTICAL CONTACTS

Primary Analyst
Susan Hawthorne
Analyst
(011) 784-1771
Susanh@globalratings.net

Committee Chairperson
Marc Chadwick
Sector Head: Insurance
(011) 784-1771
Chadwick@globalratings.net

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

Global Master Criteria for Rating Life Assurance and Reassurance Companies, Updated July 2014

Criteria for Rating Cell Captive Insurers, Updated July 2014

RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.NET/RATINGS-INFO. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.NET.

SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.

Guardrisk Life Limited participated in the rating process via written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.

The credit rating has been disclosed to Guardrisk Life Limited with no contestation of the rating.

The information received from Guardrisk Life Limited and other reliable third parties to accord the credit rating(s) included the latest available unaudited management accounts to August 2014, the full year budgeted income statement to March 2015, the quantitative and qualitative statutory returns to March 2014 and other relevant documents.

The ratings above were not solicited by, or on behalf of, the rated client, and therefore, GCR has not been compensated for the provision of the ratings.

GLOSSARY OF TERMS/ACRONYMS USED IN THIS DOCUMENT AS PER GCR’S INSURANCE GLOSSARY

Assurance

Terminology used to describe life insurance. This is common practice in Great Britain, Canada and South Africa. Insurance is usually used for the description of short-term insurance. However, the term insurance is used indiscriminately to describe both life and short-term insurance in practice.

Insurance

A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specified extent, the losses suffered by the insured.

Insurer

The party to the insurance contract whom promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public.

Policyholder

(The person in actual possession of an insurance policy.

Premium

The price of insurance protection for a specified risk for a specified period of time.

Statutory

Required by or having to do with law or statute.

GCR affirms Guardrisk Life Limited’s rating of AA-(ZA); withdraws rating

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