Announcements

GCR upgrades Pan Africa to AA-

GCR has upgraded the national scale KShs currency financial strength rating of Pan Africa Life Assurance Limited (“Pan Africa”) to AA- (double A minus), from A+ (single A plus) previously. The rating signifies Pan Africa’s long term financial stability and very high claims paying ability. This position is enhanced by its association with the Sanlam Group (holding a 50% stake), which provides managerial skills and technical support.

The establishment of strong working relationships with major Kenyan banking groups, supported by Pan Africa’s sizeable agency force and well established broker relationships helped the assurer report strong GWP growth in F10. In this regard, Pan Africa enhanced its position as the largest life assurance company in Kenya, garnering 25.4% of industry premium, followed by British American Insurance Kenya (“Britak”) with 17.7%. In terms of market segment, Britak continued to dominate the ordinary life market (24% of GWP), while Pan Africa increased its presence in the group life market to 33% (2009: 27%). Notably, Pan Africa’s deposit administration business is very small compared to similar sized insurers.

Additional key considerations supportive of the upgrade include the fact that CAR cover has been maintained in excess of 2x in recent years (group policy dictates that excess capital be disbursed to shareholders), and amounted to 4.7x at the group level. Furthermore, from a statutory perspective, the assurer reported coverage of 1.4x in F10, above the required minimum of 1x. Cognisance was also taken of Pan Africa’s relatively conservative investment stance, characterised by a high weighting of low risk government securities, commercial paper and cash deposits. While investment policy is set by Pan Africa’s board, actual decisions are entrusted to Sanlam Investment Management Kenya. On an operational level, the efficiency benefits of large group accounts have supported well contained expenses, underpinning sustained sound operating profits.

Benjamin Schmidt

https://globalratings.net/uploads/files/September_2011.pdf

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