2014-04-04 17:46:04 -
A.M. Best has affirmed the financial strength rating of B++ (Good) and issuer credit rating (ICR) of “bbb” of National Life and General Insurance Company SAOC (NLGIC) (Oman). The outlook for both ratings remains stable.
The ratings of NLGIC reflect its strong and evolving business profile, track record of good operating performance and supportive risk-adjusted capitalisation. An offsetting rating factor is the company’s reduced diversification, driven by its increased focus on medical business.
NLGIC has a strong business profile within the life and medical markets of Oman, with a growing presence in Dubai. Over recent years, the company’s profile has shifted from that of a composite insurer, with an emphasis on life business, to an increasingly focused medical underwriter. As at year-end
2013, medical business accounted for 71% of gross written premiums. This strategic shift has enabled the company to grow its underwriting operations; however, it has also led to a more concentrated portfolio.
NLGIC has a track record of good operating performance, evidenced by profit generation in each of the last five years. For 2013, the company reported overall earnings of OMR 4.7 million (USD 12.3 million), compared with OMR 3.5 million (USD 9.2 million) in 2012. This was driven by an improved underwriting result, reflecting expansion in the company’s medical portfolio and profit generation from the previously underperforming non-life operations. With the company’s focus expected to remain on medical business, future earnings are likely to be driven by the performance of this portfolio.
Risk-adjusted capitalisation improved during 2013. However, NLGIC’s capital position is anticipated to decline over the next two years, due to continued growth in underwriting operations and an increase in premium retention. Retained earnings are expected to partially offset this reduction, with risk-adjusted capitalisation anticipated to remain at an adequate level for the current rating.
Sustained improvement in underwriting performance on motor and medical business lines, combined with further strengthening of risk-adjusted capitalisation, may lead to positive rating pressure. A significant deterioration in underwriting performance or risk-adjusted capitalisation, could result in negative rating actions.
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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Best Europe - Rating Services Limited Supplementary Disclosure : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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