Credit Guarantee Insurance Corporation of Africa Limited

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Credit Guarantee Insurance Corporation of Africa Limited (2021-09)
  • Credit Guarantee Insurance Corporation of Africa Limited
  • Year : Sep 2021
3 Tokens
USD 300.00
Summary

CGIC’s earnings are assessed within an intermediate range, despite a slight moderation registered in FY20 emanating from the COVID-19 lockdown restrictions resulting in a spike in claims. In this respect, the insurer registered an unfavourable claims experience coupled with a slight increase in operating expenses, with the operating expense ratio registering at 16% (FY19: 13%), while the loss ratio equated to 96% (FY19: 77%), mainly protected by conservative deductibles on the reinsurance program.

Additional Information

The rating’s Outlook captures potential for earnings and liquidity to moderate slightly albeit remaining rating adequate. Risk adjusted capitalisation is likely to be maintained at the current level, with the statutory solvency SCR coverage ratio likely to trend above 1.3x, while the downside is protected by explicit capital support from Old Mutual Insure. An upward rating movement may follow a sustained improvement in underwriting profitability and liquidity while capitalisation is maintained within a strong range.

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