Munich Re of Africa has an international AA-S&P rating as it benefits from a parental guarantee insured by its parent company, Munchener Ruckversicherungs-Gesellschaft based in Munich. Santam’s international counterparty credit and insurer financial strength rating was adjusted from A- to BBB+ in 2014, as a result of the rating agency’s sovereign downgrade of South Africa.
Santam has entered into an agreement with leading, reinsurer, Munich Reinsurance Company of Africa Limited (MRoA) in term of which selected Santam business units will be able to use the MRoA’s Standard & Poor (“S&P) AA- credit rating to write inwards international reinsurance business. The transaction supports Santam’s strategy to profitably grow its insurance and reinsurance business flow from outside South Africa, with a particular focus on business from the rest of Africa, India, and Asia.
The revised rating was a reflection of S&P’s view on the country and was not driven by any change in the financial performance of Santam. S&P views Santam’s risk culture as positive, as it has been fully embedded across the business and is supported by an extensive risk appetite framework and effective risk governance.