APA Insurance Limited (2022-03)
- APA Insurance Limited
- Year : Mar 2022
Summary
Risk adjusted capitalisation remains a key strength, underpinned by consistent internal capital generation over the review period and conservative dividend distribution. The group’s capital base increased from KES7.3bn at FY16 to KES10.5bn at FY20. During the review year, the group disposed equity investments valued at about KES961m, reducing its market risk exposure and consequently improving GCR Capital Adequacy Ratio (“GCR CAR”) to 2.6x (FY19: 2.4x). Similarly, APA met the regulator’s prescribed capital requirement, increasing its statutory CAR to 267% (FY19: 239%).
Additional Information
The Stable Outlook reflects our expectation of continued stability in the credit profile, supported by strong levels of risk adjusted capitalisation and a sustained business profile. While claims pressure is expected to persist, we anticipate the impact on overall group earnings to be minimal. Positive rating action could result from sustenance of current risk adjusted capitalisation and improved liquidity. Conversely, a negative rating action could ensue if the core operating entity’s underwriting performance deteriorates beyond expected levels.
