ARC: Fitch rating

Fitch Ratings has assigned a financial strength rating of "BBB+" and a long-term credit rating of "BBB" to African Risk Capacity Insurance Company (ARC). The outlook for both ratings is stable.

The rating reflects the commitment and credit quality of ARC's sponsors as well as its strong capitalisation and leverage. The insurer is sponsored by the British Department for International Development (DFID) and the German development bank KfW.

This rating was granted despite the financial performance and profits that were deemed weak. ARC's combined ratio was 244% in 2019, exceeding the five-year average of 147%. This deterioration in results is due to the significant losses that were not covered by the company's reinsurance treaties.