South African agency now withdraws Fidelity Shield Insurance ratings

South African ratings firm Global Credit Ratings (GCR) has now withdrawn the credit profile of Naushad Merali-associated Fidelity Shield Insurance company for failing to disclose information, weeks after suspending the insurer's ratings.

GCR said it will no longer rate the agency adding that the BBB-(KE) rating issued after a review in November 2019, indicating high credit quality and certainty of timely payments, has been withdrawn.

"GCR Ratings has withdrawn Fidelity Shield Insurance Company Limited’s national scale financial strength rating of BBB-(KE). The rating has been withdrawn without review, as no additional analysis was performed," the agency said in a statement.

"The withdrawal was due to business reasons. Accordingly, GCR will no longer provide ratings or analytical coverage on the issuer."

The Business Daily could not reach Fidelity Shield by press time over the withdrawal.

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.

GCR recently also suspended the credit profile of Prime Bank’s Tausi Assurance company for the failing to disclose information, but has yet to state whether it will resume the ratings or withdraw them completely like is the case with Fidelity Shield.

Tausi has, however, denied that GCR withdrew its ratings for failure to disclose information saying it cancelled the ratings contract with GCR in May last year and hence had no obligation to disclose any information with the firm.

These withdrawals have 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.