<\/p>\n
Moody\u2019s Ratings has changed the outlook on several major South African insurers to positive from stable, following its recent decision to revise South Africa\u2019s sovereign outlook to positive while affirming the country\u2019s Ba2 rating.<\/p>\n
The ratings agency said insurers are closely tied to the South African economy due to their exposure to government bonds, bank deposits, investments and earnings.<\/p>\n
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Expectations grow for SA credit ratings upgrades
Positive move: Moody\u2019s \u2018upgrades\u2019 South Africa\u2019s outlook<\/p>\n
\u201cWe view key credit fundamentals such as asset quality, capitalisation, profitability and financial flexibility as closely linked to local economic and market conditions,\u201d the agency said.<\/p>\n
Discovery\u2019s long-term issuer rating was affirmed at Ba3 on the global scale and Aa3.za on the national scale, with the outlook changed to positive from stable.<\/p>\n
Moody\u2019s cited the group\u2019s strong domestic franchise, expanding global Vitality platform, diversified product mix and robust capital position, while noting its significant exposure to South Africa.<\/p>\n
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The agency said an upgrade could follow a sovereign upgrade or greater diversification away from South Africa, while a downgrade could result from a sovereign downgrade, weaker capital levels or pressure on its business model.<\/p>\n
Momentum Metropolitan Life (MML) had its insurance financial strength rating affirmed at Ba1 globally and Aaa.za nationally, with a positive outlook.<\/p>\n
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Moody\u2019s pointed to the insurer\u2019s \u201cleading market position\u201d, capital strength and loss-absorbing product features that help mitigate sovereign-related risks.<\/p>\n
An upgrade could follow a sovereign upgrade or reduced concentration in South Africa, while a downgrade could result from a sovereign downgrade or failure to maintain capital coverage above 170%.<\/p>\n
Guardrisk\u2019s rated entities \u2013 including Guardrisk Insurance, Guardrisk Life and Guardrisk International \u2013 had their insurance financial strength ratings affirmed at Ba1 global scale, with applicable national scale ratings of Aaa.za maintained and the outlook revised to positive.<\/p>\n
Moody\u2019s said the group\u2019s cell captive structure and its association with parent, Momentum Group, underpin the ratings.<\/p>\n
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The agency said stronger diversification or a sovereign upgrade could support an upgrade, while a weaker parent credit profile, lower capital coverage or pressure on the cell captive model could weigh on ratings.<\/p>\n
Listen\/read: Momentum boss Jeanette Marais talks results, share buybacks and strategy<\/p>\n
Standard Insurance Limited retained its insurance financial strength rating of Ba2 globally and Aa1.za nationally, with the outlook also moved to positive from stable. The assessment highlighted its established \u201cmid-tier\u201d position in the short-term insurance market, its affiliation with Standard Bank Group, profitability, and robust capitalisation.<\/p>\n
However, these strengths are offset by exposure to catastrophe risk relative to capital, a limited product range, concentration in the domestic market, and broader South African operating conditions.<\/p>\n
Read: The end of free insurance for investors<\/p>\n
A sovereign upgrade or greater diversification beyond South Africa could support higher ratings, while weaker capital cover, reduced reinsurance protection or the loss of its bancassurance arrangement with Standard Bank could pressure the rating.<\/p>\n
#Moodys #lifts #outlook #insurers #positive<\/p>\n","protected":false},"excerpt":{"rendered":"
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