GENRIC receives A-, Stable Outlook rating from GCR

MC du Toit, Chief Executive of GENRIC.

Milestone credit rating for GENRIC opens doors to new lines of business.

GENRIC Insurance Company Limited, an authorised financial services provider, received an A- rating from the globally-accredited rating agency, Global Credit Rating (GCR), opening up the niche short-term insurer’s book to other lines of business.

The A- rating with outlook Stable attests to GENRIC’s solid capital foundation and its ability to pay out claims.

“This A rating is a massive milestone for our company,” Chief Executive MC du Toit says. “This means that GENRIC can now move into lines of business A-rated insurers are privy to, like aviation, marine and the like. The rating not only attests to our strength as an insurance partner, but also to the new frontiers we will achieve to be more and more encompassing for our clients and their clients.”

Healthy liquidity

The A- rating means that GENRIC has the ability to pay out sizable claims and remain sustainable as a business, offering huge peace of mind to GENRIC Insurance clients.

GCR, which is the leading rating agency in Africa, submitted GENRIC to a gruelling and lengthy audit process in order to obtain the highly sought-after, but hard-earned A-rating.

“GENRIC reports a healthy liquidity position, underpinned by a large cash portfolio relative to claims and technical provisions,” GCR said in its announcement of GENRIC’s rating on 18 May. “Cash coverage of net technical liabilities is projected to remain at very high levels going forward, while operational cash requirements are managed at comfortable levels.”

GENRIC worked actively since 2012 to strengthen its balance sheet to become an A-rated short-term insurance company.

The niche insurer has been on a path of expansion, adding innovative and groundbreaking Underwriting Management Agencies to the GENRIC family, backed by highly respected and reputable team members, many of them industry legends within their own right.

GENRIC’s vision

In 2014, GENRIC set out to further strengthen its capital position by acquiring strategic stakes in some of its UMAs. Additionally, GENRIC shareholders have supported management in its mandate to build a solid A-rated insurer by not drawing dividends for four years, Du Toit says.

“GENRIC is a company with a vision,” he explains. “Our goals and our shareholders’ goals are closely aligned, which gives us confidence that we will become only stronger in our resolve to become the largest niche short-term insurer in South Africa.”

GENRIC is already well away in achieving this goal. It has started more than 10 new UMAs since the beginning of 2014, many of these pioneering never-before-seen insurance products and services in the South African market. It has struck partnerships with formidable partners like Land Bank Insurance Company to benefit GENRIC brokers, bringing diverse, customised products and services, all available in one place.

In the current financial year, ending 30 June 2015, GENRIC’s profit after tax is set to grow with 60% from the previous financial year, which in turn was already 188% up from the year ending 30 June 2013.

Open for new business

“We’ve seen phenomenal growth,” Du Toit said, adding that the last two years have been GENRIC’s start of a growth phase. “We will continue on the growth path and consolidate the spectacular expansion we’ve had over the past few years.”

Even so, GENRIC’s top and bottom line growth is set to continue in double digits for the next three to five years, when it plans to achieve an annualised gross premium written of R1 billion.

Du Toit concludes: “Our brokers now have A-class peace of mind. And we invite all those UMAs who wanted to do business with us in heavy-weight risk categories, such as the marine and aviation space, but couldn’t before we had our rating, to come and talk to us now. We will remain agile and flexible to accommodate your needs.”