Global Agency Affirms Heritage Insurance Top Rating with a Stable Outlook

Global Credit Ratings has affirmed the national scale claims paying ability rating assigned to The Heritage Insurance Company Kenya Limited of AA-(KE), with the outlook accorded as Stable.

The rating agency said Heritage Kenya’s risk-adjusted capitalization remained within a robust range, supported by strong capital growth catering for the quantum of insurance risk and market exposure. This was further supported by increased profit retention, with limited dividend distributions over the last two years.

“The insurer displays a healthy business profile, underpinned by moderate competitive positioning and fairly well-diversified earnings. Heritage Kenya’s market share has been maintained at approximately 4 percent of short-term industry gross premiums over the last four years, largely supported by competitiveness in the medical portfolio,” said GCR in a statement.

Commenting on this rating, Heritage Insurance Managing Director Godfrey Kioi noted that the firm continues to build capital at a favorable rate with innovation being a key area of focus. Looking ahead, the management is putting in place strategies that should result in more sustainable future earnings. 

Heritage Insurance has a strong ability to pay claims on the back of strong capital growth catering for the quantum of insurance risk and market exposure. The rating matches the national scale ceiling applicable to entities operating within the Kenyan insurance industry.

The Company recorded a pre-tax profit of 770.9 million shillings for the year ended December 31, 2017. This is an increase of 9 percent compared to 705 million shillings reported at the end of 2016. This outstanding performance is attributed to continued innovation, prudent management procedures, increased efficiency, accountability and cost-cutting measures implemented during the year. 

Heritage Kenya’s liquidity profile is strong, supported by robust liquidity metrics and moderately strong aggregated banking counterparty strength. Going forward, liquidity is expected to remain within a strong range, supported by sound operating cash flow generation and balanced asset allocation.

Global Credit Rating rates the full spectrum of security classes and accords both International Scale and National Scale ratings, and together with its international affiliates, rates almost 3000 financial Institutions, insurance, Corporate and Public Sector Debt.