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A.M. Best Affirms Ratings of Jordan Insurance Company Plc



2012-12-13 17:48:14 -

A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of Jordan Insurance Company Plc. (JIC) (Jordan). The outlook for both ratings remains stable.

The ratings reflect JIC’s solid business position in Jordan, robust operating performance and strong risk-adjusted capitalisation.

JIC has an established position in Jordan where it

is ranked the second-largest insurance company by gross written premium (GWP). JIC’s GWP reached JOD 46 million (USD 56 million) in 2011, representing a market share of approximately 10%. In addition, JIC’s portfolio is well distributed by lines of business on a gross basis as a result of intense product development over the years and increasing insurance awareness of the local population. Going forward, A.M. Best expects JIC to continue growing between 5% and 10% over each of the next two years, and to remain focused in the local market.

JIC remained one of the most profitable companies in Jordan in 2011.

Profit before tax stood at approximately JOD 3 million (USD 4.3 million) and represented a return over adjusted capital and surplus of 7.1%. A.M.

Best notes that whilst technical profitability has been impacted by an underperforming motor compulsory third party liability, JIC has experienced a good level of profitability throughout its portfolio.

Investments remain highly concentrated in equities and real estate and produced an investment yield of 3.9% in 2011.

JIC’s risk-adjusted capitalisation is strong, benefiting from a historically good level of earnings and profit retention. Furthermore, JIC’s risk-adjusted capitalisation benefits from a good level of business leverage, a comprehensive reinsurance programme of good credit quality and is partially offset by the company’s investment portfolio, given the concentration of investment in equities and real estate. In A.M. Best’s opinion, JIC’s risk-adjusted capitalisation is likely to remain supportive of the company’s business plan over the medium term.

Going forward, downward rating movement could occur through a material deterioration in JIC’s risk-adjusted capital level or by an increase Jordan’s country risk. Upward rating movement is unlikely over the medium term.

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”; “Evaluating Country Risk”; “Understanding Universal BCAR”; “Natural Catastrophe Test Methodology”; and “Rating Members of Insurance Groups”. 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 .. .


A.M. Best Europe – Rating Services Limited is a subsidiary of A.M.

Best Company. Founded in 1899, 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 © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best Co.Helio CorreaAssociate Financial Analyst+(44)

20 7397 0311 helio.correa@ambest.com : mailto:helio.correa@ambest.com orMahesh

MistryAssociate Director+(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

Author:
Hossam Abdel-Kader
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