Thursday, May 6, 2021

BIC receives highest rating from Global Credit Ratings

Botswana Insurance Company Limited (BIC) says that Global Credit Ratings (GCR) has reaffirmed BIC’s national scale claims paying ability rating at AA-(BW), with the rating outlook maintained as “stable”.

BIC said the rating of AA – which constitutes the highest rating a short term insurer in Botswana currently can be accorded by CGR, is regarded as positive for BIC, as it emphasises the company’s positive strategic direction.

Currently led by the newly appointed Managing Director, Johann Claasen, who took over from Dziki Nganunu end of 2014, the company stated that the rating was determined by BIC’s favourable position as the market leader in the short term domestic insurance arena, accounting for more than twice the average market premium.

“BIC has also displayed a robust level of risk adjusted capitalisation, which in anticipation of reasonably stable premium and investment mixes supports GCR’s favourable view of BIC’s future capital strength,” reads the statement.

According to the BIC, the rating is supported by BIC’s values, innovative approach and technical expertise within the business. Complementary to this, is BIC’s firm capital accumulation, which continues to remain underpinned by sound earnings generation, stemming from sustained healthy underwriting profits and stable investment income.

“Consideration was taken of BIC’s balanced investment strategy, which is supportive of adequate liquidity metrics, underpinning its claims paying ability,” says the statement.

The Claasen led company BIC also reported that it has maintained its international credit rating of BBB, with the corresponding outlook accorded as “Stable”. The company highlighted that it reflects BIC’s comparison internationally and its ability to compete on a global scale. Information contained in the statement is that international scale ratings differ from national scale ratings in the sense that they measure an entity’s ability to honour claims in hard currency, compared to a domestic currency focus of a national scale claims paying ability, thus in the process taking into account asset conversion, currency and international counterpart risk.

Global Credit Ratings (GCR) is viewed as a leading emerging market focused rating agency that rates the full spectrum of security classes, including banks, insurance companies, corporate entities, local authorities, asset management companies, funds and structured finance transactions. GCR is headquartered in Johannesburg, and has several African and sub-regional offices globally.

“The grading process requires a transparent approach, whereby the rating agency obtains detailed financial information about the company and its operations. The assessment is done on an annual basis. The current ratings are valid until November 2015,” reads the statement.

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