AM Best Affirms Credit Ratings of Ghana Reinsurance PLC

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of C++ (Marginal) and the Long-Term Issuer Credit Rating of “b+” (Marginal) of Ghana Reinsurance PLC (Ghana Re) (Ghana). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Ghana Re’s balance sheet strength, which AM Best assesses as strong, as well as the company’s adequate operating performance, limited business profile and weak enterprise risk management.

Ghana Re’s balance sheet strength is underpinned by risk-adjusted capitalisation that is expected to remain at least at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). Risk-adjusted capitalisation deteriorated at year-end 2024, but is expected to have rebounded by year-end 2025, in part due to the improved credit quality of investments in Ghana. Although economic conditions in Ghana have improved following the restructuring of its sovereign debt, the company remains exposed to elevated investment risk due to its significant holding of Ghana’s sovereign debt and exposure to the domestic banking sector through cash and deposits.

Ghana Re’s adequate operating performance assessment reflects its track record of modest profitability on an inflation-adjusted basis, with the company reporting a return on equity ratio of at least 9% in each of the five years between 2021 and 2024. Overall profitability for 2025 is expected to be negatively impacted by the effect of foreign exchange movements, with the company reporting a moderate overall loss for the first nine months of the year. Ghana Re’s profitability has exhibited a high degree of volatility year over year. The company's non-life segment reported a three-year weighted average (2022-2024) net/net combined ratio of 95.9%; however, two of these years, including 2024, were unprofitable. Ghana Re is expected to report an improved underwriting result for 2025. Overall earnings remain supported by moderate investment income.

Ghana Re maintains a dominant position in Ghana as the largest local reinsurer. While Ghana Re has achieved solid geographical diversification in recent years, with approximately two thirds of its reinsurance revenue now generated from outside of Ghana, the company lacks an established position in any of its foreign markets. Ghana Re is exposed to high levels of political, economic and financial system risks in the countries in which it operates.

The company’s risk management framework is evolving, and its risk management capabilities are weak when compared with its risk profile.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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