Moody’s completes periodic review of ratings of GIG Insurance – Egypt
The review was conducted through a portfolio review discussion took place on 25 February 2021 in which Moody’s reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
GIG Egypt’s Ba2 insurance financial strength rating (IFSR) reflects Moody’s view that the company would receive support from its parent Gulf Insurance Group K.S.C.P. (GIG, IFSR A3) in case of need.
“Given the strong brand association with the Group as well as the sharing of technical expertise, reflecting the Group’s continued commitment to the region, Moody’s incorporates three notches of support into GIG Egypt’s IFSR,” the rating agency said in a statement.
“GIG Egypt’s stand-alone credit profile reflects its top three position in the Egyptian P&C insurance market and a growing brand, good product diversification of non-life products and very good operating profitability.”
In terms of profitability GIG Egypt’s performance has been very strong with the 5-year return on capital of 29.8 percent underpinned by a very strong 5-year combined ratio of 79.5 percent in FYE 2019. Moreover, profitability has been very consistent with a very high Sharpe ratio of ROC of over 860 percent – which reflects the very strong consistency of returns on a 5-year average basis.
“These strengths, GIG Egypt’s stand-alone credit profile, and its published Ba2 IFSR, remain constrained by the meaningful direct exposure to Egypt’s sovereign risk in terms of investment portfolio and the operating risks inherent in the increasingly competitive Egyptian insurance market.”