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GCR affirms STI ‘A’ rating

By Bankole Orimisan
06 February 2022   |   2:50 am
Global Credit Rating Limited (GCR), in its rating conducted for 2021, has given Sovereign Trust Insurance Plc ‘A’.

Global Credit Rating Limited (GCR), in its rating conducted for 2021, has given Sovereign Trust Insurance Plc ‘A’.

Before now, STI was rated A- due to the company’s high claims payment among other requisite considerations.

Explaining the factors behind the current rating, GCR said it was based on the organisation’s new financial position and stable outlook from a statutory solvency perspective in the last three years.

It would be recalled that the underwriting firm in 2019 increased its shareholders’ funds from N4.1 billion to N5.6 billion through a rights issue.

The rating agency noted that the company’s solvency margin improved remarkably, and it is in compliance with the proposed regulatory capital requirement.

The report stated that “despite the effects of COVID-19 pandemic on businesses and the fallout of the nationwide protest in 2020, the impact on underwriting performance was well absorbed by an improvement in the insurer’s scale efficiencies, with operating expense ratio registered at 37 per cent in FY20 against the 53.19 per cent that was recorded in FY19.”

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