GCR has introduced a FAQ on the Criteria for Rating Insurance Companies to provide greater clarity regarding the approach to regulatory insulation for FSR ratings. In essence, the criteria allows GCR to provide greater levels of regulatory insulation for the FSR ratings of insurance companies.
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.
A positive change in the sector risk score could lead to ratings improvements for Kenyan exposed financial institutions and potentially other entities that are exposed to the Kenyan financial institutions sector risk score, either through their own sector risk scores or via the sovereign hurdle.
GCR introduces the draft Appendix to Criteria for Rating Financial Services Companies: Asset Management Issuer Credit Ratings, representing a new approach to the analysis of credit ratings for Asset Managers. This proposed criteria appendix acts as a supplement to GCR’s Criteria for Rating Financial Services Companies, published in May 2019, providing a breakdown of how the components are to be assessed and scored for entities falling within its scope. Consequently, it must be read in conjunction with the criteria, which can be found at GCRratings.com/criteria.