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Sanlam’s top credit profile affirmed

MUGO

Sanlam CEO Mugo Kibati. FILE PHOTO | NMG

South African-based global credit ratings agency GCR has affirmed Sanlam Life Assurance Ltd #ticker:PAFR financial strength at AA-(KE) with a stable outlook.

GCR said Sanlam Life Kenya reflects a strong credit profile.

“This is supported by a strong competitive position, moderately strong liquidity, and moderately strong capitalisation. The insurer’s capitalisation is expected to improve over the medium term, in line with the planned de-risking of the balance sheet,” it said.

The report added that earnings capacity is viewed to be intermediate, with the strategic shift towards individual life business likely to offset cost efficiencies derived from the revised commission structure.

“As such, earnings capacity is expected to remain at an intermediate level. Sanlam Life Kenya’s stand-alone credit profile is viewed to be supported by implied shareholder support,” the report added.

READ: Sanlam buys into online broker targeting East Africa

The rating is valid until June 2018. Sanlam Life Kenya is majority-owned by South African-based Sanlam Group.

In mid-July, Sanlam’s earlier rating scale was placed under review after expiry in June.

The last rating had been done in June 2016 placing the underwriter’s financial strength at AA-(KE) with a stable outlook.

The ‘AA-’ rating scale implies that it has very strong financial security characteristics relative to other issuers or obligations in the same country, differing only slightly from those rated higher.