Connect with us

General

Fitch Assigns African Risk Capacity IFS ‘BBB+’ With Stable Outlook

Published

on

African Risk Capacity

By Adedapo Adesanya

Fitch Ratings has assigned African Risk Capacity Limited (ARC Ltd), the commercial subsidiary of the African Risk Capacity Group (ARC Group), an ‘Insurer Financial Strength (IFS) Rating of ‘BBB+’ and a ‘Long-Term Issuer Default Rating (IDR) of ‘BBB’ with a stable outlook.

Announcing the rating on its official website, Fitch indicated that “the ratings reflect the commitment and credit quality of ARC’s sponsors, as well as the company’s good business profile, very strong capitalisation and leverage.”

Continuing, Fitch stated that, ARC Ltd.’s capital position is very strong, and a key strength for the rating level, adding that the company benefits from the treatment of the $67 million of Class C members’ returnable capital as Tier 1 capital under the Bermudan Solvency regime; and as equity capital under Fitch’s Prism Factor-Based Capital Model (Prism FBM).

As a result, ARC Ltd reported a Bermudan enhanced capital requirement (ECR) ratio of nearly 2500 per cent at March 31, 2020, while the company’s score on Fitch’s Prism FBM was “Extremely Strong” at end-2019.

Speaking on this development, the CEO ARC Ltd, Mr Lesley Ndlovu noted, “Obtaining an industry rating is an important enabler for our strategy to access new business by taking on inwards reinsurance, thereby allowing us to better meet the needs of countries by supporting national agricultural insurance schemes and providing capacity to local insurance companies.”

“Considering that this is the first time ARC Limited is being rated, we are gratified for being ranked among the top-notch insurance companies in Africa. With only one notch lower than Africa Re, we are encouraged more than ever to leverage our competitive edge towards becoming the best disaster risk insurer in Africa in the service of our Member States”, Mr Ndlovu concluded.

ARC Ltd is funded by the UK Department for International Development (DFID) and the German Development Bank KfW. Fitch’s assessment of these funders’ willingness and ability to support ARC results in a one-notch uplift to its standalone credit profile.

In addition to their capital contributions, Fitch believes DFID and KfW provide support to the company that is positive to the credit rating through governance and strategic input, while also facilitating sovereign participation in the business through premium subsidy schemes.

Also sharing his satisfaction with the rating, Mr Ibrahima Cheikh Diong, the Group Director-General, ARC Group, agreed that a BBB+ ranking of ARC Ltd, by an internationally acclaimed agency like Fitch, should boost the faith of ARC stakeholders in the viability of its model relative to meeting set obligations to the Member States.

“Our approach in providing sovereign disaster risk insurance coverage to African Union Member States is anchored on the mandate to ensure that vulnerable populations receive immediate support upon the trigger of the set parameters. Ultimately, we want to become the development insurer of choice for Africa offering multiple products; and a BBB+ by Fitch is a bold step in this quest”, said Mr Diong.

By Fitch’s assessment, ARC’s portfolio diversification is still limited as the company currently offers a single parametric insurance product covering drought risk. Geographic diversification is moderate with the 2019/20 risk pool (‘members’) covering only 11 African Union Member States out of a possible 34, with the number of members having been volatile in prior years. Fitch expects ARC’s business profile to improve through increased diversification as more countries sign up to the ARC project attracted by a broader range of products.

ARC was established to be managed on a commercial basis and achieve very modest profits, but this remains secondary to the company’s development goals. Fitch believes a degree of risk tolerance is inherent in the company’s underwriting practices as development goals are prioritised over underwriting margins.

The rating actions factored in Fitch’s current assessment of the impact of the COVID-19 pandemic, including its economic impact, under a set of rating assumptions outlined on Fitch’s website. These assumptions were used by Fitch to develop Pro-forma financial metrics for ARC Ltd that are compared with rating guidelines defined in its criteria. Under the rating-case assumptions, ARC Ltd’s credit fundamentals remain good and commensurate with a ‘BBB+’ IFS Rating.

In just over 6 years of operations, 56 policies have been signed by the ARC Member States with $83 million paid in premiums for cumulative insurance coverage of $641 million and the protection of 64.1 million vulnerable population in participating countries.

From this, ARC Ltd made $60m payouts to the Governments of Senegal, Niger, Mauritania, Malawi, Cote D’Ivoire, the START Network and WFP following droughts episodes in 2014, 2015 and 2019. These funds have gone towards assisting over 2.5 million people whose livelihoods rely on agriculture, preventing the loss of hard-earned developmental gains in addition to 1 million.

Governments have used ARC Ltd insurance payouts to scale up cash transfers, subsidize livestock feeds, replenish depleted food reserves, and distribute emergency food supplies. Recently, in 2020, payouts of $2.13 million were made to the Republic of Madagascar to cover 600,000 vulnerable population; and $1.8m to the Government of Zimbabwe and WFP to support over 500,000 people affected by the drought.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

General

Pastor Ogbueli’s Abuja Night of Glory Holds Today

Published

on

Abuja Night of Glory

By Blaise Udunze

Momentum is gathering for the Abuja Night of Glory taking place today, Friday, December 5, 2025, at the main bowl of the Moshood Abiola National Stadium.

The crusade is being hosted by Dominion City Church headed by Pastor David Ogbueli and it starts by 7pm.

The all-night programme will feature dynamic worship leaders like Nathanial Bassey, Dunsin Oyekan, Theophilus Sunday, Chioma Jesus, Kaestrings, Sunmisola Agbebi Okeleye, Minister GUC, Ebuka Songs, Anthony Kani, and DC Angels.

Reputed as a teacher of righteousness and anointed minister of the gospel, evidenced by the miracles that have trailed his ministry, and one who champions the cause of the poor through empowerment initiatives, Dr. David Ogbueli will be joined by renowned ministers from within and outside Nigeria, including Evangelist Andres Bisonni, Dr. Charles Ndifon, Evangelist Dan Scott, Apostle Ikechukwu Nnajiofor, and several others.

Night of Glory has, in previous editions held across Nigeria’s cities, recorded remarkable results, such as immediate healings and freedom from chronic ailments, recovery of vision and movement after many years of paralysis, along with liberation from dependencies and emotional distress. Numerous participants have also shared testimonies of breakthroughs and big personal changes after the experience. Organisers state that this year’s event, in Abuja, is anticipated to exceed previous editions.

The event is intended for all individuals trusting God for divine intervention in any area of life.

Understanding the role of faith in the destiny of individuals and nations, a dedicated prayer session for Nigeria will take place during the crusade to tackle some of the current challenges being faced in the country and also to uplift he leaders and institutions before God.

Attendance is free, and registration is encouraged via the QR codes on event banners. Organisers expect a massive turnout as worshippers travel from across the country for what is anticipated to be a transformative encounter.

Adequate security and free transportation have been put in place ALL over the city of Abuja, while those outside Abuja are expected to join online.

Continue Reading

General

Rivers Speaker, 15 Other Lawmakers Leave PDP for APC

Published

on

rivers speaker Martin Amaewhule defect

By Modupe Gbadeyanka

The Speaker of the Rivers State House of Assembly, Mr Martin Amaewhule, has defected to the All Progressives Congress (APC).

At the plenary on Friday, Mr Amaewhule joined the ruling party from the opposition Peoples Democratic Party (PDP), along with 15 other members of the state parliament.

This development comes some months after they had earlier declared their support for the APC in the wake of a crisis with the state governor, Mr Sim Fubura.

The lawmakers had an issue with Mr Fubura, which led to a state of emergency declared on the oil-rich state by President Bola Tinubu in March 2025.

This embargo was only lift in September 2025 after the duration of the six-month emergency rule in the state.

A few days ago, members of the Rivers Assembly passed a vote of confidence on President Tinubu, backing him to remain in office till 2031, when he would have spent eight years in office if re-elected in 2027.

Announcing their defection today, the lawmakers pinned their decision on the crisis rocking the PDP at the national level.

It is not certain if their political godfather, Mr Nyesom Wike, who is the current Minister of the Federal Capital Territory (FCT), will join them in APC.

Mr Wike, who governed Rivers State from 2015 to 2023, has been accused of instigating the crisis in the opposition PDP. He was expelled from the party last month at a national convention held in Ibadan, Oyo State.

Continue Reading

General

Nigeria Risks Brain Drain in Energy Sector—PENGASSAN

Published

on

energy sector

By Adedapo Adesanya

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has warned that Nigeria risks massive brain drain in the oil and gas sector due to poor remuneration.

The president of PENGASSAN, Mr Festus Osifo, said at the end of the National Executive Council (NEC) meeting of the union on Thursday in Abuja that the industry was facing challenges arising from Naira devaluation and inflation, noting that, oil and gas skills remained globally competitive.

Painting an example, he said, “A drilling engineer in Nigeria does the same job as one in the US or Abu Dhabi,” noting that the union must take steps to bridge the wage gap to prevent members from leaving the country for better opportunities abroad.

“If we don’t act, the brain drain seen in other sectors will be child’s play,” he said.

According to him, PENGASSAN has recorded significant gains through collective bargaining across oil and gas branches.

“We signed numerous agreements across government agencies, IOCs, service and marketing sectors,” he said.

He said the agreements brought relief to members facing rising costs of living, adding that, the association’s duty is to protect members’ jobs and enhance their pay.

Mr Osifo urged companies delaying salary reviews and those foot-dragging as a result of the prevailing economic realities, to do the needful.

He said the industry employed some of the nation’s best talents, making competitive pay critical to retaining skilled workers.

“This industry recruits the best. Companies must provide the best conditions,” he said.

On insecurity, Mr Osifo urged government to take decisive action against terrorism and kidnappings across the country.

“We are tired of condemnations. government must expose sponsors and protect citizens,” he said.

He urged government at all levels to prioritise tackling insecurity through better funding and equipment for security agencies.

Mr Osifo said PENGASSAN supported calls for state police to improve local security response, adding that decentralising policing will protect citizens better than rhetoric.

He also said economic indicators meant little, if food prices remained high and farmers could not return to farms due to insecurity.

“Nigerians want to see food on the table, not macroeconomic figures,” he said, urging the government to coordinate fiscal and monetary policies to ensure economic gains reach households.

Continue Reading

Trending