GLICO Group rated ‘B’ by Standard and Poor

The GLICO Group has been rated “B” by Standard and Poor (S&P), an international credit rating agency, the executive chairman of the group, Mr Kwame Achampong-Kyei, has announced.

According to him, GLICO was the first insurance company in Ghana to be rated by the international rating agency, saying that “this goes to confirm that we are indeed the pace-setters in the insurance industry, both for practices and in standards”.

At a press conference to make the announcement, Mr Acheampong-Kyei described the rating as a remarkable achievement for the GLICO Group.

Rationale 

He explained that the journey for the award began in the last quarter of 2013 when the group invited S & P to appraise its operations, including structures, financials and risk profile and award them fair rating.

The rationale behind the exercise, Mr Achampong-Kyei noted, was in line with the company’s core values and strategic plans to go international and expand the groups business horizon to enable it to align its operations competitively with international standards.

In today’s modern business practice, he said it was no longer expedient for a company, especially an insurance company, which sought to do business with major clients to declare its own financial stability.

“There is the need for an internally recognised independent organisation, such as the S & P to measure an insurance company’s capacity in paying claims to its customers” he noted.

Justifying the “B” rating, Mr Achampong-Kyei explained that GLICO could have been awarded “A”  but the generally frail economic outlook in the country pushed the company to “B”.

According to him, the S & B analysts stated that “Our insurance industry and country risk analysis (IICRA) or Ghana is assessed as high. Although we view capital and earnings as upper adequate, the high risk position, reflecting the weakness of Ghana’s economy is a major offsetting factor”. 

However, he said the “B” rating had made the company proud and urged them to continue to put in their best to bring insurance to the door step of Ghanaians.

Recommendations 

As part of lessons learnt from the exercise, he said the company was going to implement the recommendations made by the S & P analysts.

Some of the recommendations, he mentioned, included setting up a group risk department to monitor and advise on all risk related activities at the group level.

“We have also assessed our assets portfolio and are taking the necessary steps to diversify them to minimise our risk exposure” he stated.