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AM Greatest has affirmed the monetary power ranking of B (Honest) and the long-term issuer credit standing of “bb+” (Honest) for East Africa Reinsurance Firm Restricted (EARe), based mostly in Kenya. The outlook for each rankings is secure.

The rankings are based mostly on EARe’s stability sheet power, which AM Greatest classifies as very robust. The rankings additionally consider the corporate’s satisfactory working efficiency, restricted enterprise profile, and marginal enterprise danger administration.

The corporate additionally advantages from low underwriting leverage. Nevertheless, the rankings think about EARe’s publicity to elevated financial, political, and monetary dangers in Kenya, the place most of its property are concentrated. In response to the latest deterioration within the credit score high quality of Kenya’s authorities debt, the corporate is implementing actions to de-risk its funding portfolio.

EARe has a historical past of satisfactory working efficiency, with return-on-equity outpacing inflation in Kenya over the previous 5 years. Prudent underwriting has contributed to improved technical efficiency, with a internet/internet mixed ratio of 94.1% for 2023, representing a 4.5 proportion level enchancment from 2022, based on AM Greatest.

General earnings proceed to learn from robust funding revenue, pushed by the excessive rates of interest in Kenya.

With insurance coverage service income of $33 million in 2023, EARe is taken into account a small reinsurer on a worldwide scale. The corporate operates in additional than 30 international locations throughout Africa and Asia, with the majority of its premium revenue coming from East African markets.

In different latest rankings developments, AM Greatest has additionally affirmed the monetary power ranking of A- (Wonderful) and the long-term issuer credit standing of “a-” (Wonderful) for Stonefort Reinsurance SA, a Luxembourg-based subsidiary of HOCHTIEF Aktiengesellschaft.

HOCHTIEF, a significant development agency headquartered in Germany, is majority owned by ACS, Actividades de Construcción y Servicios, SA. The outlook for these credit score rankings stays secure.

Stonefort Reinsurance has maintained a robust and secure working efficiency over time, primarily as a consequence of strong underwriting outcomes. From 2019 to 2023, the corporate achieved a five-year weighted common mixed ratio of 79.4%, as calculated by AM Greatest.

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