Announcements Criteria Research

GCR Publishes Insurance Sector Risk Score for the Kingdom of Eswatini.

Johannesburg, 31 January 2020: GCR Ratings (“GCR”) has published the Insurance Sector Risk Score for the Kingdom of Eswatini (“Eswatini”).

The Insurance Sector Risk Scores are available for download at gcrratings.com/risk-scores/.

The GCR Insurance Sector Risk Assessment

The Insurance sector risk score (ranging from 0 to 15) is a key factor in the operating environment component score. The core of the GCR Ratings Framework is based on GCR’s opinion that an entity’s operating environment largely frames its creditworthiness. As a result, the operating environment analysis anchors the underlying risk score for the GCR rating methodology. GCR combines elements of the country risk and sectoral risk analysis, blended across countries for entities operating across multiple jurisdictions, to anchor an insurer to its current operating conditions. For more details on any of the above, please read the related criteria and research listed below.

GCR will periodically publish updated “Insurance Sector Risk Scores”, which will supersede previous publications. The publication titled “GCR Insurance Sector Risk Scores, 31 January 2020”, available at https://gcrratings.com/risk-scores/, supersedes the article published on 11 December 2019.

Insurance Sector Risk Scores

ESwatini, Sector Risk Score 2.75. Country Risk Score 2.5*, Mapping Table 2.5 to 3.0

Eswatini’s insurance sector risk score of 2.75 reflects the counterbalance of low earnings risk and an intermediate regulatory environment by limited market size. The regulatory environment is characterised by a developing risk based solvency regime, an intermediate legislative framework and somewhat average transparency, albeit moderated by low levels of policy enforcement. The insurance market is limited in size at a density of USD60 per person, albeit with insurance penetration regionally competitive at 1.9%. This, combined with a few number of players in the market and limitations to potential new entrants, supports a low earnings risk profile, with consolidated industry profit margins expected to trend within healthy ranges and real industry growth potential likely to average within the 5% to 10% range over the medium term. The insurance sector risk score is adversely impacted by GCR’s assessment of Eswatini’s financial sector.

*Country Risk scores as at date of publication.

Analytical contacts

Primary analyst Godfrey Chingono Deputy Sector Head: Insurance
Johannesburg, South Africa GodfreyC@GCRratings.com +27 11 784 1771
Secondary analyst Linda Matavire Associate Analyst
Johannesburg, South Africa LindaM@GCRratings.com +27 11 784 1771

Related criteria and research

Criteria for the GCR Ratings Framework, May 2019

Criteria for Rating Insurance Companies, May 2019

GCR Country Risk Scores, 31 January 2020



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