SAM Consequences of the S&P and Fitch Downgrade

Last month’s downgrade of South Africa’s long-term foreign currency sovereign credit rating by S&P Global and Fitch Ratings has been the topic of much discussion, due to its far-reaching repercussions.

The media has been dominated by speculation and forecasts by leading economists and financial experts, all pointing to a very challenging road ahead. There can be no doubt that the road to recovery will be long and turbulent, affecting all sectors of the South African economy as well as the financial well-being of other countries in the region.

The downgrade also affects the insurance industry and poses challenges to both short- and long-term insurers alike. It has the potential to impact the SAM balance sheet and particularly the risk considerations of the Solvency Capital Requirement. We discuss this impact in the most recent article on our website (click here), which is available for your information should you wish to learn more about this topic.


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