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The rating affirmation reflects the insurer’s very strong financial profile, characterised by very strong risk adjusted capitalisation and liquidity, while the strong earnings capacity assessment factors in an expected normalisation in underwriting profitability and continued sound net earnings. Goldstar Insurance Company Limited’s (“Goldstar”) robust financial profile is a function of strong capital generation from operations and a low risk retention operating model, albeit with high banking counterparty concentration factoring into GCR’s view of capital and liquidity management.
The Stable Outlook reflects the entrenched nature of the insurer’s limited business profile, which although under pressure from new market entrants, has remained unchanged. An improvement in the business profile would be positive to the rating as well as a reduction in banking counterparty concentration. The rating could be downgraded on the back of a material and/ or sustained reduction in the business profile and earnings.