Sovereign Trust Insurance Gets GCR A Rating

International Credit Rating Agency, Global Credit Rating Limited (GCR) has confirmed Sovereign Trust Insurance Plc as an A rated underwriting firm.

The agency gave the confirmation at its 2021 rating exercise carried out recently.

Spokesman of Sovereign Trust, Mr Segun Bankole said Sovereign Trust Insurance was rated A- due to its high claims paying ability amongst other requisite considerations for the rating.

He said the current rating from A-to A, according to GCR is based on the company’s renewed financial position and stable outlook from a statutory solvency perspective in the last three years.

Sovereign Trust in 2019 increased its shareholders’ funds from N4.1b to N5.6b through the Rights Issue that was carried out in that year,

Bankole reported the rating agency as stating that the company’s solvency margin improved remarkably, and that it was very much in compliance with the proposed regulatory capital requirement for the industry.

He said, “despite the effects of the COVID-19 pandemic on businesses and the fallout of the nationwide protest in FY20, the impact on underwriting performance was well absorbed by an improvement in the insurer’s scale efficiencies.

He said with operating expense ratio registered at 37.0 percent in FY20 against the 53.19 recorded in FY19.” Also, investment income maintaining an upward trajectory over the review period, thereby supporting return on revenue at 10.5 per cent in FY20 as against 8.5 percent recorded in FY19. GCR expects STI’s liquidity metrics to remain sound on the back of conservative asset allocation and the planned additional capital injection.

Bankole quoted the rating agency and said that Sovereign Trust Insurance has a strong direct business generation capacity, which has over time stimulated retail segment penetration. The premium mix is considered well diversified and can still be improved upon in the years ahead.

He said the company aims at becoming one of the top five in the insurance sector within the shortest possible time.
To achieve this, Bankole said effort was being made to open new channels of distribution to afford Nigerians qualitative insurance products and services through borderless technology that would serve as an enduring game-changer in the insurance market space.

He further said Sovereign Trust Insurance Plc was committed to attracting and retaining the best hands in the insurance business in Nigeria with a rare combination of proven professionals from diverse areas of discipline.