SA agency suspends Fidelity Shield Insurance ratings

South African ratings firm Global Credit Ratings (GCR) has suspended the credit profile of Naushad Merali-associated Fidelity Shield Insurance company for failing to disclose information.

GCR said the BBB-(KE) rating issued after a review in November 2019, indicating high credit quality and certainty of timely payments, has been withdrawn.

"No information has been received and therefore a review of the ratings cannot be finalised based on GCR’s information sufficiency standard requirement," the ratings firm said in assessment update.

"A credit rating suspension does not imply that the entity is not servicing its debt obligations or that its financial position has deteriorated, but rather that it has failed to provide important information pertaining to its credit profile.”

Therefore, GCR added, it may continue to provide ratings and analytical coverage for company should it avail the required information.

GCR recently also suspended the credit profile of Prime Bank’s Tausi Assurance company for the same reason of failing to disclose information.

Fidelity Shield's ratings were last reviewed in November 2019.

Data from Insurance Regulatory Authority (IRA) shows that as at March 31, 2020, Fidelity Shield Insurance controlled 1.42 percent of general insurance market share.

These ratings actions come at a time when the insurance sector is undergoing difficulties due to lower income in the general economy due to Covid-19 that has led to lower premiums coming into the companies.

Insurance premiums fell by Sh806.6 million in the first three months of last year ahead of coronavirus in Kenya that has led to job losses, closure of businesses and pay cuts.