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Zep-Re awarded stable rating on strong growth

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The chairman board of directors ZEP Re [PTA insurance company] Mr.William Erio address annual stakeholders meeting at Seran beach hotel in this picture taken on 27 May 2016. FILE PHOTO | NMG

Regional reinsurer Zep-Re has been rated a stable outlook by Johannesburg-based Global Credit Ratings (GCR) on the back of a 24 per cent average annual growth rate in capital.

GCR says it has affirmed Nairobi-based Zep-Re’s (PTA Reinsurance Company) national scale claims paying ability rating at AA+(KE), and accorded it a stable outlook. The rating is valid until July 2019.

Zep-Re’s capital went up to $228 million (Sh22.8 billion) in 2017, which GCR says will adequately cater for medium-term growth strategies.

“The international solvency margin is equated to a very high 199 per cent in 2017 compared to 190 per cent in 2016, and is expected to remain within a very strong range over the outlook horizon,” said GCR in their report.

“Therefore, risk adjusted capital adequacy is likely to remain resilient, supported by the sizeable capital base, while the adoption of an internal capital model could further mitigate solvency risks over the longer term.”

GCR said the reinsurer’s liquidity remains strong and can tolerate cash demands from regional commitments.

The agency further said the Zep-Re has an aggressive long-term growth strategy that seeks to enhance market share in eight existing markets.

Zep-Re was created by an agreement of heads of state and government of the Comesa region in November 1990, subsequently starting operations in 1993. Other than Nairobi, it also operates regional offices in Zimbabwe, Cote D’Ivoire, Cameroon, Zambia, and a Retakaful window in Sudan.

The reinsurer’s shareholding structure comprises six governments, 12 private companies, 12 national insurance/reinsurance firms, and three regional organisations.

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