Agusto & Co. hereby assigns a ‘Bbb’ rating to WAPIC Insurance Plc. The rating reflects WAPIC’s good solvency level, good liquidity profile and experienced management team.
However, offsetting the rating is the Group’s relatively high-cost profile and low investment returns, which have continued to suppress profitability. The related-party concentration in the investment portfolio is also a rating constraint.
The impact of the COVID-19 pandemic on the insurance industry in Nigeria and Ghana is incorporated in our outlook for the Group.
Whilst we expect the impact of the pandemic to limit growth opportunities in the non-life business lines, we believe performance will be sustained by prospects in life insurance. The early compliance with the regulatory-induced recapitalisation also provides adequate room for growth and buffers to absorb possible losses.
On this basis, we have attached a stable outlook to the rating assigned to WAPIC Insurance Plc, which will be closely monitored to reflect material changes in the operating terrain as the impact of the COVID-19 pandemic unfolds.
This rating expires 30 June 2021.