Fitch Ratings has upgraded Societe Tunisienne de Reassurance’s (Tunis Re) National Insurer Financial Strength (National IFS) Rating to ‘AA(tun)’ from ‘AA-(tun)’. The Outlook is Stable.
The upgrade of Tunis Re reflects continued improvements in its Enterprise Risk Management (ERM) framework compared with local market practices, said Fitch.
It also takes into account its robust credit fundamentals relative to Tunisian peers’ amid the COVID-19 pandemic, with a very strong business profile locally, strong profitability and moderate asset risk.
The company’s risk-based internal capital model was reviewed by a leading international audit firm in 2020, which the rating agency said it viewed positively as it brings the company’s risk management practices somewhat closer to EU Solvency 2 standards, in the absence of local risk-based regulatory requirements.
It also takes into account its robust credit fundamentals relative to Tunisian peers’ amid the COVID-19 pandemic, with a very strong business profile locally, strong profitability and moderate asset risk
The National IFS Rating reflects the leading position of Tunis Re in the Tunisian reinsurance market, as well as its strategic role within the Tunisian economy, underpinned by its strong ties with its cedants, retrocessionaires and the Tunisian State.
“Our assessment of the company’s business profile is constrained by increasing diversification into high-risk geographies, with limited potential for expansion into sound-quality international business,” the rating agency pointed out.