AM Best has assigned African reinsurance firm SanlamAllianz Re (SAZ) a financial strength rating of A- (excellent) and a long-term issuer credit rating of a- (excellent), both with a stable outlook.
SAZ Re manages catastrophe risk across regions and territories aligned with the Sanlam Allianz Joint Venture group. Its major shareholders are Sanlam Limited (South Africa) and Allianz SE (Germany).
The rating agency stated that these determinations reflect the strength of the company’s balance sheet, which has strong risk-adjusted capitalisation. As the company executed its planned expansion, AM Best expects this strength to remain.
However, the agency noted that many SAZ Re assets are from institutions with weaker credit quality. This could offset balance sheet strength, it said, as could moderate levels of debtor balances on the balance sheet. Risk from this could be somewhat mitigated by the fact that these are mainly from affiliated entities, it added.
A neutral business profile and appropriate risk management were also commended by AM Best, along with a strong operating performance. In four of the last five years SAZ Re’s return on equity has exceeded 18%, the agency said. Further, net combined rations have remained below 83% thanks to the company’s low operating expense.
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