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Agusto & Co. assigns an “A+” rating, with a ‘positive’ outlook to Zenith General Insurance Company Limited

Rating Release

Agusto & Co. assigns an “A+” rating, with a ‘positive’ outlook to Zenith General Insurance Company Limited

The rating expires on 30 June 2020.

The rating assigned to Zenith General Insurance Company Limited (“ZGIC” or “the Insurer”) reflects a strong capital base, good liquidity profile and an experienced management team. By the end of the 2019 financial year, ZGIC would have met the new regulatory minimum capital requirement of ₦10 billion for non-life Insurers, by transferring ₦4.5 billion from revenue reserves to paid-up capital. Offsetting these positive rating factors are ZGIC’s high claims profile and rising underwriting costs which weakened profitability during the period. The assigned rating is also constrained by weak economic growth which adversely impacts insurance penetration.

The positive outlook reflects stronger growth prospects compared to its counterparts as the Underwriter is not fraught with capital raising challenges in the short term. Nonetheless, a decline in the operating performance of ZGIC may trigger a reversal to a stable outlook. Agusto & Co may also review the assigned rating should there be a marked improvement in ZGIC’s profitability.

 

This Rating Release is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating release may be used by you in full or in part without changing the meaning or context thereof but with due credit to Agusto & Co.