Agusto & Co., a leading credit rating agency, has announced the upgrade of Unitrust Insurance Company Limited’s rating to “A-” with a stable outlook. The upgraded rating is valid until June 30, 2025.
The new rating underscores Unitrust Insurance’s solid financial foundation, driven by strong shareholder support and a robust capital base. Agusto & Co. highlighted the company’s prudent asset allocation strategy, which focuses on money market instruments to maintain a strong liquidity profile. This approach is particularly critical given the unpredictable nature of claims associated with the non-life insurance sector.
Key Drivers of the Rating Upgrade
The rating reflects several positive factors:
- Shareholder Support and Capital Base: Unitrust Insurance’s strong capital position has been instrumental in bolstering its resilience in the dynamic insurance landscape.
- Liquidity Strength: Strategic investment in money market instruments has ensured the company maintains a healthy liquidity profile to meet claim obligations promptly.
- Improved Performance: Enhanced investment returns and better risk underwriting results have contributed to the insurer’s improved financial performance.
However, Agusto & Co. noted certain challenges constraining the company’s growth prospects. Rising operating costs, macroeconomic pressures, and the low penetration of insurance products in Nigeria continue to pose significant hurdles for the sector.
Industry Outlook
Unitrust Insurance’s upgraded rating reflects its ability to navigate a challenging operating environment while maintaining financial stability. The company’s focus on strategic asset allocation and risk management has positioned it as a resilient player in Nigeria’s insurance industry.
Agusto & Co. emphasized the importance of addressing systemic issues such as economic headwinds and low insurance uptake to unlock the sector’s full potential.
The rating upgrade is a testament to Unitrust Insurance’s commitment to excellence and its strategic initiatives to deliver value to stakeholders despite prevailing market challenges.
