Rating Release
Agusto & Co. affirms the “Bbb” rating and stable outlook assigned Anchor Insurance Company Limited
The rating expires on 30 June 2021.
Agusto & Co. hereby affirms the ‘Bbb’ rating assigned to Anchor Insurance Company Limited (‘Anchor’ or ‘the Company’ or ‘the Insurer’). The rating reflects the Insurer’s good shareholder support as evidenced by the ₦5.7 billion raised through a rights issue exercise which enabled the Company to meet the NAICOM minimum capital regulation, well ahead of the September 2021 deadline. The rating also considers the Company’s experienced management team and its good liquidity profile. However, constraining the rating is Anchor’s weak profitability which has been suppressed by low investment returns and a comparably high-cost profile.
In addition, we consider the current risk management practices to be subpar. The rating is also constrained by the weak economic climate accentuated by the COVID-19 pandemic coupled with the anticipated claims from the arson and business destructions that followed the civil unrest in H2 2020.
