ICEA LION Life Assurance Company Limited (Sep 2024)


ICEA LION Life Assurance Company Limited (ICEA LION Life) traces its history of writing life insurance risks back in 1966 post the establishment of The Insurance Company of East Africa (ICEA) in 1964. During the year 2000, ICEA LION Life set up a composite insurance company in Uganda. In 2012, the entity was renamed to ICEA LION Life Assurance Company limited, after a business merger with a sister company, Lion of Kenya Insurance Company Limited. In 2020, ICEA LION Insurance Holdings Limited (ICEA LION Holdings or the group) was established to consolidate the entity and a sister company ICEA LION General Insurance Company Limited (ICEA LION General). This resulted in new shareholding at group level and further functional realignment of regional businesses under core general and life entities Consequently, ICEA LION Life disposed of ICEA LION General Insurance Company (Uganda) Limited to ICEA LION General and majority of its stake in ICEA LION Asset Management Limited to the group. As at December 2023, the insurer remains a core subsidiary, contributing c.46% of the group’s insurance revenue and asset contribution of above 80% in 2023. Considering the materiality of the subgroup’s contribution to the group’s credit fundamentals, the analytical method followed for the purpose of determining ICEA LION Life’s rating is a group approach, with the insurer’s credit strength equalised to that of ICEA LION Holdings.
ICEA LION Holdings is an investment holding, with interests in insurance, asset management and trust businesses in Kenya, Uganda and Tanzania. The group is owned by First Chartered Securities (“FCS”) with a majority stake of 75.9%. FCS is in turn wholly owned by the ultimate parent company, Asset Managers Limited. The remaining shareholding is held by Prudential Financial Inc, an entity incorporated in the United States of America.
In fiscal year 2023, subsidiaries housed and consolidated under the group included:

❖ ICEA LION Life Assurance Company Limited (ICEA LION Life), together with its subsidiary (ICEA LION Life Assurance Company (Uganda) Limited;
❖ ICEA LION General Insurance Company Limited (ICEA LION General), encompassing its subsidiaries: ICEA LION General Insurance Company (Tanzania) Limited) and ICEA LION General Insurance Company (Uganda) Limited;
❖ ICEA LION Asset Management Limited, including its subsidiary ICEA LION Asset Management (Uganda) Limited); and,
❖ ICEA LION Trust Company Limited.

In line with industry practice, ICEA LION Life adopted IFRS 17 reporting from January 2023 and comparative years were retrospectively restated from the transition date of 1 January 2022. With the new standard referencing the insurer’s portfolio. ICEA LION life insurer measured the group life, group credit annual premium, and deposit administration contracts using the premium allocation approach (PAA) whereas for ordinary life, group credit single premium and annuity, the general measurement model (GMM) was applied. Below were the main changes due to change in standard:

❖ The impact on the in the income statement and eventually the company’s equity position, relates to adoption of the new models or defined insurance and reinsurance contracts. This mainly speaks of the impact of discounting, recognition of loss component and inclusion of risk adjustment component. The initial application of the standard also directly affects the equity position based on aforementioned factors that were backdated.
❖ Various balance sheet line items including receivables, reinsurance share, deferred acquisition cost, unearned premium reserve, are modelled in as part of cashflows expected while measuring the insurance/reinsurance contract liabilities/assets.

Consequently, ICEA LION Holdings also transitioned to IFRS 17 financial reporting resulting in a restatement of earned revenue following the aforementioned changes in revenue allocation.

Download



Global Credit Rating Company Limited and/or its licensors and subsidiaries (collectively, “GCR”). All rights reserved.

CREDIT RATINGS ISSUED BY GCR ARE GCR’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY GCR (COLLECTIVELY, PUBLICATIONS) MAY INCLUDE SUCH CURRENT OPINIONS. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE. SEE APPLICABLE GCR RATING SCALES, SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY GCR’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”) AND OTHER OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. GCR’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND GCR’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. GCR’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.

GCR’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE GCR’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT GCR’S PRIOR WRITTEN CONSENT.

GCR’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by GCR from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. GCR adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources GCR considers to be reliable including, when appropriate, independent third-party sources. However, GCR is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, GCR, its affiliates and its and their directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if GCR or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by GCR.

To the extent permitted by law, GCR, its affiliates and its and their directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, GCR or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY GCR IN ANY FORM OR MANNER WHATSOEVER.

GCR hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) rated by GCR have, prior to assignment of any credit rating, agreed to compensate GCR for the provision of those credit ratings opinions and services rendered by it. GCR also maintains policies and procedures to address the independence of GCR’s credit ratings and credit rating processes.