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Wednesday 16 June 2021
HomeAfricaBritish rating firm bolsters African insurer's credit worthiness

British rating firm bolsters African insurer’s credit worthiness

Africa’s prospective investors will be guaranteed compensations for any losses they incur as a result of political instability in the continent, following a favourable credit rating of the African Trade Insurance Agency (ATI).

ATI, an agency set up under the ambit of the Common Market for Eastern and Southern Africa (COMESA) to help attract investors by offering risk insurance, has been rated highly by the British credit-rating agent, Standards and Poor (S&P).

The Standards and Poor, one of the world’s most respected credit rating agencies whose rating means an almost instant assurance of more foreign cash, has rated ATI with a long term A, emphasising the firm’s capacity to meet its financial costs.

ATI’s Chief Executive Peter M. Jones said on Wednesday that getting the “A” rating was a key milestone for the insurer, from which more businesses in Africa would benefit.

“This is a significant milestone in our history that is certain to open up more business opportunities for us,” he said in a statement made available to PANA.

He noted that for ATI to engage with regional and international commercial enterprises, it was important for it to attain an investment grade rating from a major international credit rating agency.

ATI is pleased that S & P has the foresight to support the rating process in Africa in general, and to assign an “A” rating, Jones said.

He said the new credit rating would lead to increased opportunities to support trade and investment in the 19-member COMESA trading bloc, which spans from Zimbabwe to Egypt, as a direct result of the rating.

Jones said this would result in increased international trade and investment for Africa.

By the rating, ATI shareholders will get an improved return on their investment, while its African Member States will register increased international trade.

Jones also expressed the hope that it would encourage more African States to join the Agency in order that their business community could also benefit from the products and services offered by ATI.

An Insurer’s Financial Strength rating is a current opinion of the financial security characteristics of an insurance organisation with respect to its ability to pay under its insurance policies and contracts in accordance with their terms.

African firms will most likely benefit from such credit ratings which could mean enhanced access to long-term loans and most importantly, a business soother for highly valued capital ventures, mostly undertaken in the continent’s mining industry.

ATI is Africa’s only multilateral political and credit risk-insurer.

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