A.M. Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of bbb- of Continental Reinsurance Plc (Continental Re) (Nigeria), the operating holding company of the Continental Re group of companies. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Continental Res balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management.
A.M. Best expects Continental Res balance sheet strength to remain supported by the strongest level of risk-adjusted capitalisation, as measured by Bests Capital Adequacy Ratio (BCAR). Over recent years, increasing capital requirements have been driven by the companys aggressive growth strategy and compounded by exposure to unquoted equities. During 2018, the company is expected to receive a total capital injection of USD 25 million to support its strategic initiatives.
Continental Re has maintained adequate operating performance over the past five years despite the challenging macro-economic environment in which it operates. Underwriting results improved materially in 2017, with the company reporting an underwriting profit of NGN 323 million (USD 0.9 million) driven primarily by the absence of major losses and the stabilisation of acquisition and operating expenses. Over time, as it implements its growth strategy, A.M. Best expects the company to benefit from economies of scale and improve its underwriting performance. Although Continental Res portfolio remains concentrated to Nigeria, which accounts for approximately half of its gross written premiums, it continues to develop its profile across Africa through the establishment of regional subsidiaries, which act as hubs that improve access to various markets.
This press release relates to Credit Ratings that have been published on A.M. Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and A.M. Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and A.M. Best Rating Action Press Releases.
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