Jubilee, ICEA Lion accorded strong claims paying rating

Global Credit Rating (GCR) has affirmed the positive national scale claims-paying ability of Kenyan insurers Jubilee Insurance #ticker:JUB and ICEA LION of AA-(KE), with their outlook accorded as stable.

The South African firm has in the recent past accorded Mayfair Insurance good rating but given Saham and #ticker:CIC falling grades.

GCR said Jubilee Kenya’s consolidated risk-adjusted capitalisation reduced from “a strong to a moderately strong level”.

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“Jubilee Kenya reflects a moderately strong aggregated earnings profile. The insurer posted a consolidated profit of Sh902 million in the financial year 2016, translating into a net margin of 5 per cent,” said GCR in an assessment report.

“The long-term business has registered improved operating margins over the past two years (with the financial year 2016 at 13 per cent and financial year 2015 at 11 per cent), which were supported by consistent business-wide investment income flows, offsetting the negative impact of short-term underwriting margin compression,” it said.

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“Long-term liquidity metrics registered at sound levels, reflecting increased investment in government securities.”

On the other hand, ICEA LION’s reflects strong risk-adjusted capitalisation, underpinned by a sizeable capital base catering for the quantum of insurance and asset risks.

“Accordingly, the international solvency margin amounted to a high 90 per cent at the financial year 2016 compared to (the financial year 2015 at 107 per cent),” said GCR.