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The Hollard group’s credit profile is bolstered by an entrenched market position, underpinned by a strong franchise in the South African short-term sector (market share of around 8%), and a fairly competitive long-term book with a stable market share of around 1%. The group exhibits good brand visibility reinforced by multiple partner businesses, which contributed to a stable premium scale of around R20.5bn over the past two years. Furthermore, the short-term conventional business evidences material premium scale in multiple business lines that is expected to support market position and premium diversification over the medium term, complemented by a proportionately sizeable conventional life book.
The Stable Outlook expresses our view that the group’s credit profile is fully anchored within the current rating range, supported by a stable business profile. The current slow gross premium growth is not seen to materially alter the business profile assessment over the medium term. The rating could be upgraded over the medium term if solvency ratios are sustained within the current range and further improvements in liquidity are registered, while demonstrating sufficient control over earnings.