2013-01-31 16:02:35 -
A.M. Best Europe – Rating Services Limited has removed from under review with negative implications and affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-”of Al Ittihad Al Watani (L'Union Nationale) Societe Generale d'Assurances du Proche Orient sal (Al Ittihad) (Lebanon). The outlook assigned to both ratings is negative.
A.M. Best placed the ratings of Al Ittihad under review in 2012 following the suspension of the company’s licence in Kuwait as a result of an internal fraud. This rating action was taken in order to give A.M.
Best sufficient time to assess the full implications of the situation.
Having investigated these issues, A.M. Best decided to maintain the company’s ratings at a secure level given that
management appears to have successfully navigated Al Ittihad through the worst of the crisis, whilst remaining in sound financial condition.
Al Ittihad’s risk-adjusted capitalisation, as per Best’s Capital Adequacy Ratio model, is considered to be strong, benefitting from the revaluation of the real estate and the capital injection it received in 2012.
Al Ittihad is taking a number of corrective measures and improving internal controls. A.M. Best will continue to monitor the company’s progress in this regard in addition to the situation with its Kuwaiti licence, which is yet to be reinstated.
Negative pressure on the ratings of Al Ittihad may arise should management not be able to return the company to technical profitability or should it become apparent that longer-term damage has been inflicted on Al Ittihad’s franchise.
Positive rating movements are considered highly unlikely in the short-term. However, the outlook is likely to be revised to stable should Al Ittihad demonstrate stability in earnings, whilst implementing improvements in its risk management.
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. Key criteria utilised include.
“Understanding Universal BCAR”; “Catastrophe Analysis in A.M. Best Ratings”; “BCAR for Life/Health Insurers”; “Rating Members of Insurance Groups”; and “Evaluating Country Risk”. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology :
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In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M.
Best Europe - Rating Services Limited Supplementary Disclosure :
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Best Company. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.
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A.M. BestDean PortelliSenior Financial
Analyst+(44) 20 7397 0267
dean.portelli@ambest.com : mailto:dean.portelli@ambest.com orMahesh
MistryDirector+(44) 20 7397 0325
mahesh.mistry@ambest.com : mailto:mahesh.mistry@ambest.com orRachelle
MorrowSenior Manager, Public Relations+(1) 908
439 2200, ext. 5378
rachelle.morrow@ambest.com : mailto:rachelle.morrow@ambest.com orJim
PeavyAssistant Vice President, Public Relations+(1)
908 439 2200, ext. 5644
james.peavy@ambest.com : mailto:james.peavy@ambest.com
