AM Best Affirms Credit Ratings of ZEP-RE (PTA Reinsurance Company)

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of ZEP-RE (PTA Reinsurance Company) (ZEP-RE) (Kenya). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect ZEP-RE’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

ZEP-RE’s balance sheet strength is underpinned by its risk-adjusted capitalisation that is comfortably at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and benefits from a prudent asset allocation and low underwriting leverage. The ratings consider ZEP-RE’s exposure to high levels of economic, political and financial system risks, which are associated with operating in core Eastern, Southern and West African markets. However, this risk is mitigated partially by ZEP-RE’s good geographic diversification across countries in Africa. In addition, investment risk has reduced materially in recent years, as ZEP-RE has increased the allocation of its deposits and debt instruments into territories with low country risk exposure.

ZEP-RE has a track record of strong operating performance across the underwriting cycle, albeit with some volatility. Over the past five years (2020-2024), the company has reported a return-on-equity (ROE) ratio in the range of 4% to 10% (these metrics are calculated using a combination of IFRS 4 and IFRS 17 reported figures). AM Best notes that ROE should be viewed in the context of ZEP-RE’s high levels of capitalisation, and the moderating impact of its reporting currency (USD), which somewhat limits the effects of high inflation in many African markets on the company’s reported net income. ZEP-RE’s profitability has been supported by solid underwriting performance, evidenced by a three-year (2022-2024) weighted average net/net combined ratio of 86.6%, under IFRS 17.

ZEP-RE operates as a composite reinsurer across Africa, with a focus on countries of the Common Market for Eastern and Southern Africa (COMESA), and the Conférence Interafricaine des Marchés d’Assurances (CIMA) regions. The company’s competitive position benefits from compulsory cessions in several sub-Saharan African countries.

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 www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251119474502/en/