2013-09-03 17:46:02 -
A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Emirates Insurance Company P.S.C. (EIC) (United Arab Emirates). The outlook for both ratings remains stable.
EIC’s capital position remains strong, benefiting from low underwriting leverage and a reinsurance programme of good credit quality.
Furthermore, EIC’s risk-adjusted capitalisation is sufficiently strong to absorb earnings volatility generated by its investment portfolio and projected annual growth of 10% to 15% over the next two years. Capital requirements are driven by EIC’s investment profile, with equity exposure accounting for over 50% of total invested assets in 2012.
EIC has maintained a top five position in the domestic market, with gross written premium remaining
stable at AED 645 million (USD 176 million). In addition to its established position within the UAE, EIC is seeking diversification through facultative inward reinsurance business from the Afro-Asian territories, which is expected to be one of the main drivers of premium growth over the coming years.
EIC has demonstrated a strong track record of technical profitability with combined ratios consistently below 80%, driven mainly by motor, property and engineering business lines. Moreover, despite a high concentration of investments geared towards equity and private investment funds, the investment yield has remained stable in the last three years at approximately 6%.
Upward rating movements are unlikely at present. Downward rating pressures could arise if there were a material decline in EIC’s rick-adjusted capitalisation and/or a material deterioration in financial performance.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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