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AM Best Affirms Credit Ratings of East Africa Reinsurance Company Limited
[September 22, 2023]

AM Best Affirms Credit Ratings of East Africa Reinsurance Company Limited

AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of "bb+" (Fair) of East Africa Reinsurance Company Limited (EARe) (Kenya). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect EARe's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.

The balance sheet strength assessment is underpinned by EARe's risk-adjusted capitalisation being at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), and benefits from a conservative investment allocation by asset class and low underwriting leverage. The ratings also consider the company's exposure to the very high economic, political and financial system risks in Kenya, where the majority of EARe's assets are invested.

EARe has a track record of adequate operating performance, evident by a five-year (2018-2022) weighted average return-on-equity (ROE) ratio of 10%. AM Best notes that this ROE should be viewed in light of Kenya's moderate levels of inflation, which have averaged approximately 6% over the same period. Whilst life operations have generally been profitable, EARe recorded a breakeven underwriting performance in its non-life business, which accounted for over 70% of total premiums over the past five years (2018-2022). The company's investment operations have contributed positively to its earnings, as demonstrated by a five-year weighted average net investment return of 9%, excluding gains.

EARe is a small reinsurer by global standards, with gross written premium of USD 37 million in 2022. The company has a presence in over 30 countries in Africa and Asia, with premium volumes skewed toward East African markets.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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