AM Finest has assigned a Monetary Power Ranking of B+ (Good) and a Lengthy-Time period Issuer Credit score Ranking of “bbb-” to WAICA Reinsurance Company PLC (WAICA Re) (Sierra Leone). The outlook assigned to those Credit score Rankings (scores) is secure.
The scores mirror WAICA Re’s steadiness sheet power, which AM Finest categorises as very robust, in addition to its robust working efficiency, restricted enterprise profile and marginal enterprise danger administration.
WAICA Re’s steadiness sheet power is underpinned by the strongest stage of risk-adjusted capitalisation, as measured by Finest’s Capital Adequacy Ratio. The evaluation considers the corporate’s conservative funding technique, with nearly all of the portfolio held as money and deposits, and low stage of retrocession dependence. offsetting issue is the corporate’s publicity to the numerous financial, political and monetary system dangers related to the nations the place WAICA Re operates, which embody Nigeria, Ghana and Sierra Leone.
WAICA Re has a observe file of robust working efficiency, demonstrated by a five-year (2015-2019) weighted common mixed ratio and return on fairness of 87.zero% and 9.5%, respectively. Potential earnings are anticipated to stay robust, underpinned by stable technical efficiency, and complemented by optimistic, albeit modest, funding returns, reflecting the low-yielding property wherein the corporate primarily invests.
AM Finest considers WAICA Re’s enterprise profile to be restricted owing to its comparatively small dimension and geographic focus of enterprise in Nigeria and Ghana. The corporate reported gross written premium of USD 64.5 million in 2019. While AM Finest expects WAICA Re to develop its premium base regularly by diversification into different markets, enterprise will proceed to originate primarily from Nigeria and Ghana.
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Stanislav Stoev, ACCA
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Ghislain Le Cam, CFA, FRM
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