GHANA Reinsurance Company Limited (Ghana Re) has assured its clients that the company will continue to pay claims promptly despite losing its BB+ ratings recently.
The Acting Managing Director of Ghana Re, Mr Gustav Siale, who gave the assurance in an interview with the Daily Graphic in Accra, added that the company was also strategising to enable it “resume our rightful position in credit rating very soon.”
A.M. Best Europe Rating Services Limited, an insurance ratings agency, earlier this week downgraded the Issuer Credit Rating (ICR) of Ghana Re from BB+ to BB, citing the reinsurer’s weakened business profile within its core market, outstanding premium debts and a reduced premium income as the bases.
The state-owned nature of Ghana Re, according to A. M. Best, also exposes the company to industry shocks as it risks state interferences in its operations.
The agency, however, re-affirmed Ghana Re’s financial strength rating (FSR) at ‘B’, indicating fair.
The current downgrading of Ghana Re could cause it to lose more businesses within and outside the country, limit its operations in markets that accept ratings higher than its current BB or cause multi-nationals in the country to take their insurance premiums outside with the excuse that the company’s rating fell below their standing.
While admitting that the downgrade would affect the future operations of the company, the acting MD said “our reputation for prompt claim payment would even help win us more businesses.”
Mr Siale explained that although the insurance regulation enjoined companies operating in the country to first exhaust the local reinsurance capacity before heading outside, some companies circumvented the regulation using ratings as a point.
Mr Siale was confident, however, that the company’s internal operations would help stem such challenges and make it write more businesses in the coming years.
He called for more collaboration between insurance companies and Ghana Re to help grow the country’s insurance industry.
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