Announcements

Jubilee Kenya maintained at AA-

GCR has maintained the national scale KShs currency claims paying ability rating of The Jubilee Insurance Company of Kenya Limited (“Jubilee Kenya”) at AA- (double A minus).

The rating takes into account Jubilee Kenya’s position as the largest non-life insurer in the market, together with its strong brand (particularly in medical insurance). The insurer is also one of the larger participants within the life market. The rating was further supported by the company’s shareholding structure, and its enhanced access to capital. Cognisance was taken of the notable strengthening in the insurer’s international solvency margin to 70% in F10. Note is, however, taken of the fact that the trend in solvency has been erratic, given the company’s large exposure to the volatile equity market (with non-life quoted shares representing 57% of capital). Solvency is forecast to remain above 70% in F11, which, coupled with statutory solvency cover above 2x, is required to maintain the current rating. It was further noted that Jubilee Kenya comfortably complied with the regulatory minimum in the life business in F10, achieving 1.4x coverage. The company has consistently reported solid underwriting profits over the last three years, supported by a fairly stable loss ratio and reduction in delivery costs.

The improvement in claims cash coverage in F10 was considered, although it continues to measure below the industry average. In addition, while the further diversification of the net book away from the dominant medical class is noted, this has increased the insurer’s exposure to motor (which underperformed in F10).

Sheri Few
https://globalratings.net/uploads/files/Aug_Insights_2011.pdf

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