Guardrisk ratings affirmed despite tough trading environment

Moody’s Investors Service has confirmed the ratings of the three rated Guardrisk businesses: Guardrisk Insurance and Guardrisk Life are both rated Baa3 on the global scale Insurance Financial Strength (IFS) and Aaa.za on the national scale IFS; and Guardrisk International is rated Baa3 on the global scale.

However, Moody’s credit opinion has changed the outlook for all three of the rated Guardrisk businesses from stable to negative, in line with the rating of South Africa (Baa3, negative).

While the Moody’s report notes that Guardrisk's ratings are constrained by South Africa’s sovereign credit rating, it acknowledges Guardrisk’s good market position as the largest cell captive insurer in the South African market; its low underwriting risk due to its predominantly fee based model; its diverse product mix across life insurance and short-tailed non-life insurance lines; and the business’ strong profitability.

“Guardrisk obviously has no control over South Africa’s sovereign rating, but it is commendable that the business has retained its ratings – especially the national Aaa.za ratings of Guardrisk Insurance and Guardrisk Life; particularly given the challenges in the local trading environment at the moment,” says Guardrisk CEO, Herman Schoeman.