CiC General Insurance Ltd

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CIC General Insurance Limited (2022-03)
  • CiC General Insurance Ltd
  • Year : Mar 2022
3 Tokens
USD 300.00
Summary

The group’s risk adjusted capitalisation is viewed to be intermediate, albeit at risk due to high investment property concentration to capital. Notwithstanding the KES296.8m net loss incurred, no dividend extraction was expected in FY20, thereby sustaining the GCR at 1.4x. Nevertheless, property exposure remains high, accounting for about 97% of the capital base, with about half of it collateralised against an outstanding credit facility.

Additional Information

The Negative Outlook reflects rating sensitivities on risk adjusted capitalisation, mainly prompted by execution risks on the disposal of investment property to de-risk the balance sheet, and earnings pressure at the core operating entity level. This is coupled with the credit profile’s sensitivity to medium term liquidity risk from the substantial shareholder loan. The rating could be downgraded if existing concerns on 1) persistent earnings pressure, leading to vulnerable coverage of finance costs and reduction in capitalisation, and 2) increased liquidity risks from the repayment of the medium-term loan relative to expected scenarios, are not satisfactorily resolved.

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