Botswana Insurance Company Limited (BIC), the local insurance house said Global Credit Ratings (GCR) has reaffirmed its national scale claims paying ability rating at AA-(BW), with the rating outlook maintained as “Stable”.

According to the company, the rating of AA- which constitutes the highest rating a short term insurer in Botswana currently can be accorded by the rating agency is regarded as positive for BIC, as it emphasizes the company’s positive strategic direction.

“The rating was determined by BIC’s favourable position as the market leader in the short term domestic insurance arena, accounting for more than twice the average market premium,” the company said.

“BIC has also displayed a robust level of risk adjusted capitalisation, which in anticipation of reasonably stable premium and investment mixes supports GCR’s favourable view of BIC’s future capital strength”.

BIC said the rating is supported by its values, innovative approach and technical expertise within the business. Equally, complementary to this, is BIC’s firm capital accumulation, which continues to remain underpinned by sound earnings generation, stemming from sustained healthy underwriting profits and stable investment income. “Further, consideration was taken of BIC’s balanced investment strategy, which is supportive of adequate liquidity metrics, underpinning its claims paying ability.”

BBB Rating

BIC also announced that it has maintained its international credit rating of BBB-, with the corresponding outlook accorded as “Stable”, which reflects BIC’s comparison internationally and its ability to compete on a global scale.

“International scale ratings differ from National scale ratings in the sense that these measure an entity’s ability to honor claims in hard currency, compared to a domestic currency focus of a national scale claims paying ability, thus in the process taking into account asset conversion, currency and international counterpart risk.”

According to BIC, the grading process requires a transparent approach, whereby the rating agency obtains detailed financial information about the company and its operations. The assessment is done on an annual basis. The current ratings are valid until November 2015.

“The grading exemplifies BIC’s commitment to providing exceptional quality products and services to its clientele. The company has been in existence since 1975 and continues to focus on commercial, personal and specialised insurance.”

The Johannesburg based GCR is a leading emerging market focused rating agency that rates the full spectrum of security classes, including Banks, Insurance companies, corporate entities, Local Authorities, Asset Management companies, Funds and Structured Finance transactions.