A.M. Best, the global insurance rating agency has affirmed WAPIC Insurance Company’s financial strength rating of “B-(Fair)” and issuer credit rating (ICR) of “bb-”.
The agency said the outlook for both ratings is stable.
With this rating, Wapic Insurance is one of the three insurance companies rated in Nigeria by A.M. Best.
A. M Best said rating of Wapic Insurance was a display of its confidence in the financial capabilities and future outlook of the company which is a full line service provider in the insurance industry and one of Nigeria’s oldest insurance firm with operations in Ghana.
According to statement from the rating agency, “the ratings of Wapic reflect its developing business profile in the Nigerian insurance market, its high expense base that constraints its earnings prospects and its solid risk-adjusted capitalisation. The ratings also consider Wapic’s exposure to Nigeria’s weakened economic conditions and the impact on the domestic insurance sector’s increasingly challenging operating environment.”
Wapic has been operating under new management since 2013 following its divestment by Access Bank. The group reported consolidated gross written premiums of NGN 5.0 billion (approximately USD 25.0 million) in 2014. Under its new business strategy, the group seeks to strengthen is competitive position by developing its profile within the corporate segment and increasing is underwriting of compulsory lines resulting in planned growth in excess of 25% per annum for the medium term.
A.M. Best expects Wapic’s risk-adjusted capitalisation to be maintained at a solid level, based on its performance forecasts and earnings retention. Wapic’s balance sheet strength is supported by a conservative investment portfolio consisting mainly in cash and fixed income investments as well as a panel of highly rated reinsurers.
Wapic Insurance management in a statement on the rating said: “we are delighted at the outcome of the 2015 rating review. It underscores the successful execution of the company’s strategic plan which is being methodically executed. We will continue to strengthen our underwriting capabilities and further enhance our presence in the highly competitive markets of Nigeria and Ghana by investing more in our distribution capabilities.”
The United States based rating agency, which commenced operations in 1906 is the World’s oldest and most authoritative insurance rating and information source with its “Best’s Credit Rating Methodology” as a yardstick for determining financial strength and credit worthiness for insurance companies.