First Assurance Company Limited (2022-03)
- First Assurance Company Limited
- Year : Mar 2022
Summary
The insurer’s cash and stressed assets coverage of net technical liabilities was sustained at around 1.1x following a conservative allocation of investments in favour of government securities, offsetting an increase in the technical reserves. While the liquidity ratio is expected to be sustained by improved receivable collection mechanisms and yields from the government securities, the entity remains highly exposed to operating costs which could lower cash generated from operations and support a lower factor assessment.
Additional Information
The Negative outlook is premised on the possibility of the pressure from earnings impacting liquidity. This could result to the liquidity ratio reducing to below 1.1x. The rating could be downgraded on account of a material reduction in earnings, resulting in the entity’s liquidity and risk adjusted capitalization registering below current levels.
