A.M. Best Places Credit Ratings of African Reinsurance Corporation Under Review With Negative Implications

LONDON--()--A.M. Best has placed under review with negative implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of African Reinsurance Corporation (Africa Re) (Nigeria).

These Credit Rating (rating) actions follow further analysis of the corporation’s capital structure, namely the rights of shareholders to sell their shares back to Africa Re. The unique feature of these put options highlights potential concern over the permanence of the capital structure. Africa Re’s management team has initiated a course of action that will likely address A.M. Best’s concern and result in the corporation’s ratings being affirmed. However, if this is unsuccessful, rating downgrades can be expected.

Supporting rating factors include Africa Re’s recent robust financial performance and the strong demand that the corporation has for its shares. Africa Re has a stable shareholder base composed of a diverse range of African (re)insurance companies and nation states, many of which are strategic investors. Furthermore, due to the corporation’s low level of underwriting leverage, its balance sheet strength is able to withstand a number of investors exercising their put options in a short time frame.

This press release relates to Credit Ratings that have been published on A.M. Best’s 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. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Rishwinder Grewal, +44 20 73970321
Financial Analyst
rishwinder.grewal@ambest.com
or
Tim Prince, +44 20 7397 0320
Director, Analytics
timothy.prince@ambest.com
or
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Rishwinder Grewal, +44 20 73970321
Financial Analyst
rishwinder.grewal@ambest.com
or
Tim Prince, +44 20 7397 0320
Director, Analytics
timothy.prince@ambest.com
or
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com