2014-04-25 17:33:03 -
A.M. Best has downgraded the financial strength rating to C+ (Marginal) from B- (Fair) and issuer credit rating to “b-” from “bb-” of Arabia Insurance Cooperative Company (AICC) (Saudi Arabia). The outlook for both ratings remains negative. Concurrently, A.M. Best has withdrawn the ratings as the company has requested to no longer participate in A.M.
Best’s interactive rating process.
The rating downgrades reflect significant deterioration in AICC’s risk-adjusted capitalisation during 2013, following large underwriting losses and adverse reserve development.
In 2013, AICC reported a loss of SAR 103 million (USD 28 million), reducing capital and surplus from SAR 167 million (USD 45 million) to SAR 64 million (USD 17 million) at year-end 2013. The weak underwriting performance stemmed from poor claims
experience on three large group motor accounts, in addition to reserve strengthening of approximately SAR 23 million (USD 6 million) on incurred but not reported reserves.
Underwriting losses in the first quarter of 2014 have created further strain on risk-adjusted capitalisation.
AICC is currently below the regulatory minimum capital requirements, despite relinquishing its reinsurance license. The company has indicated that it intends to replenish capital levels; however no timeline has been set.
Positive rating movement could arise from a capital injection substantially improving AICC’s level of risk-adjusted capitalisation.
Further losses and deterioration of capital could lead to a negative rating action.
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 ..
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 : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
" title="http://cts.businesswire.com/ct/CT?id=bwnews&sty=20140425005580r1&sid=16929&distro=ftp\"/>" target="_blank" rel="nofollow">cts.businesswire.com/ct/CT?id=bwnews&sty=20140425005580r1&am ..
A.M. Best Company, Inc.Michael Dunckley, +(44) 20 7397
0321Associate Financial Analyst email@example.com
: mailto:firstname.lastname@example.org orMahesh
Mistry, +(44) 20 7397 0325Director, Analytics email@example.com
: mailto:firstname.lastname@example.org orRachelle
Morrow, +(1) 908-439-2200, ext. 5378Senior Manager, Public
: mailto:email@example.com orJim
Peavy, +(1) 908-439-2200, ext. 5644Assistant Vice
President, Public Relations firstname.lastname@example.org