According to Adam Samie, CEO of Lion of Africa Insurance, the company has firmly established itself in its market and has the highest rating of any South African short-term insurance company that is wholly run on black empowerment principles.
S&P says that the company's high status as a verified Level 1 contributor differentiates it from the competition and indicates that it has a supportive shareholder with the same empowerment ethos. Furthermore, the rating agency says that the stable outlook of the company reflects their opinion that the company will continue to develop its competitive position in the South African market in both new and existing lines of business, as well as grow its presence in the wider African market.
According to S&P, the company's operating performance is its key strength and has benefited from a reasonable return on investment over the past three years. The company has a prudent investment strategy. This is due to its portfolio which primarily focuses on liquid bonds and cash and limited exposure to equities, as well as having its capitalisation built on good capital adequacy and adequate reserves and reinsurance.
S&P also expect the company to maintain its capitalisation at a good level, with interest and coverage ratios maintained within current tolerances, in part because of good investments and liquidity.
