CICA-RE gets AM Best affirmation
CICA-RE gets AM Best affirmation | Insurance Business Asia
Reinsurance
CICA-RE gets AM Best affirmation
The credit rating agency affirms its financial strength rating and long-term issuer credit rating
Reinsurance
By
Abigail Adriatico
Credit rating agency AM Best has affirmed Compagnie Commune de Réassurance des Etats Membres de la CIMA’s (CICA-RE) credit ratings, in terms of both its financial strength rating and the long-term issuer credit rating.
The strength of CICA-RE’s balance sheet was assessed as “very strong”, reflected by its operating performance, business profile, and enterprise risk management.
The reinsurer’s balance sheet strength was underpinned by its capitalization, AM Best suggested. The credit rating agency expects this to stay above the minimum level required to be assessed as strong. Its balance sheet strength meanwhile, was seen as being a result of good financial flexibility, attributed to successful capital raises from its new and existing shareholders.
The reinsurer was also noted as having a diversified investment portfolio, although it was noted the assets were concentrated only in the Conférence Interafricaine des Marchés d’Assurances (CIMA) region.
How is CICA-RE performing?
CICA-RE was deemed as having an adequate operating performance track record. From the years of 2018-2022, the firm had a weighted average combined ratio of 94% and a 5% investment yield. AM Best believes that the reinsurer will continue to boast a robust underwriting performance, complemented by a good investment income.
The reinsurer’s neutral business profile assessment reflected the strength of its market position in the CIMA region. With revisions made to the legal cessions structure in the region in 2020, the firm has been able to see significant growth in its portfolio as its gross written premium (GWP) increased to $173 million in 2022 from the $109 million in the previous year.
According to AM Best, the outlook of the credit ratings of “B+” for its financial strength rating and a “bbb-” for its long-term issuer credit rating are stable.
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