2013-01-24 15:18:54 -
A.M. Best Europe – Rating Services Limited has downgraded the financial strength rating to B++ (Good) from A- (Excellent) and issuer credit rating to “bbb+” from “a-“ of Islamic Arab Insurance Co. (Salama) (United Arab Emirates). The ratings have been removed from under review with negative implications and assigned a negative outlook.
Concurrently, A.M. Best has withdrawn the ratings as the company has requested to no longer participate in A.M. Best’s interactive rating process.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 actions are due to the uncertainty regarding Salama’s main subsidiary, BEST RE (L) Limited (BEST RE) (Malaysia), and the potential implications for Salama’s capitalisation, operating performance and profile.
Salama’s performance in the first three quarters of 2012 was affected by the adverse development of Thailand
flood losses at BEST RE, with Salama’s loss ratio rising to 76%, against 57% in the same period in 2011. BEST RE represented 66% of Salama’s gross written premiums in 2011, and therefore is material to the group.
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: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Rating Members of Insurance Groups”; and “Insurance Holding Company and Debt Ratings”.
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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