Lion of Africa Insurance improves credit rating

Johannesburg – Over the past few months Lion of Africa Insurance embarked on a journey to improve its credit rating.

The substantial amount of time and effort that was devoted to ensure that the progress made at Lion over the past 18 months is reflected in the credit agencies’ assessment of the company, Lion said on Friday.

On May 3 2017 Global Credit Ratings (GCR) assigned an initial national scale claims paying ability rating to Lion of BBB(ZA), with the outlook accorded as stable.

"This was the first time in recent years that GCR has conducted a rating for Lion. Lion was advised by several stakeholders to utilise GCR, in order to give stakeholders a sense of Lion’s claims paying ability," said Lion.

"The level of robustness of the questions posed, introspective engagement and the level of detail of the information required from them was much more than required previously."

On May 17 2017 Standard & Poor’s (S&P) also revised its outlook to stable (from Negative) and maintained the previous rating.

"The rating and outlook issued by GCR is as a result of the strategic turnaround implemented during the previous 18 months, which includes the exiting of the corporate and personal lines businesses, effective implementation of the RAG (Risk Appetite Grid), as well as enhancing the underwriting skills and pricing capabilities," said Lion.

"In addition, the focus on strengthening the balance sheet and resultant improvement in our solvency gives comfort that Lion cover its claims. Furthermore, the fact that our outlook has been revised by S&P proves that our strategy is yielding the desired results, that our company is well capitalised and that there is stability in the business."

S&P is subsequently withdrawing the rating services at Lion’s request as it is not financially prudent to spend money on two rating agencies.