SanlamAllianz Re assigned “Excellent” credit ratings from AM Best with stable outlook

Pan-African reinsurer SanlamAllianz Re Ltd (SAZ Re) has been assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent), both with a stable outlook by AM Best.

This positive assessment highlights SAZ Re’s financial standing, with AM Best acknowledging the company’s strong balance sheet, operating performance, and enterprise risk management.

The ratings also reflect SAZ Re’s strategic importance to its parent companies, Sanlam Limited and Allianz SE, the agency noted.

“SAZ Re’s balance sheet strength is underpinned by its risk-adjusted capitalization at the strongest level,” stated AM Best in its release. The agency expects this strong capitalization to continue as SAZ Re pursues its growth strategy.

While acknowledging the quality of SAZ Re’s investment portfolio, AM Best noted that the quality of SAZ Re’s assets is considered to be an offsetting factor to the balance sheet strength assessment given the generally weaker credit quality of institutions in many of SAZ Re’s key markets.

The agency also noted that, while SAZ Re carries a moderate level of debt, another offsetting factor, this is partially offset by the fact that they are principally due from affiliated entities.

“SAZ Re has a track record of strong operating performance as demonstrated by a return on equity that has exceeded 18% in four of the past five years (2019-2023). Robust operating results are underpinned by solid underwriting margins, with net combined ratios consistently below 83% in all of the past five years, benefiting from the company’s low operating expenses,” AM Best stated.

SAZ Re holds a key position within the Sanlam Allianz Joint Venture. It acts as the group’s primary reinsurer for catastrophe risk across all its operating territories, ensuring that the overall risk retained aligns with the group’s risk appetite.

While a relatively small player on the global reinsurance stage, AM Best stated, SAZ Re boasts a diverse portfolio of business across Africa, reflecting the international scope of the Sanlam Allianz Joint Venture.

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