CORRECTING and REPLACING A.M. Best Affirms Credit Ratings of Gulf Insurance Group K.S.C.P. and Gulf Insurance and Reinsurance Company K.S.C. (Closed)
Salman Siddiqui, ACA, +44 20 7397 0311
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
Ghislain Le Cam, CFA, FRM, +44 20 7397 0268
Jim Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations
Fifth paragraph, first sentence of release dated June 15, 2017 should read: GIG’s risk-adjusted capitalisation remains good, despite the company suffering foreign exchange translation losses in Egypt, which drove down capital and surplus by 9% to KWD 83 million (USD 273 million) at year-end 2016 (instead of (USD 625 million)).
The corrected release reads:
A.M. BEST AFFIRMS CREDIT RATINGS OF GULF INSURANCE GROUP K.S.C.P. AND GULF INSURANCE AND REINSURANCE COMPANY K.S.C. (CLOSED)
A.M. Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of Gulf Insurance Group K.S.C.P. (GIG) and its subsidiary, Gulf Insurance and Reinsurance Company K.S.C. (Closed) (GIRI) (both domiciled in Kuwait). The outlook of these Credit Ratings (ratings) remains stable.
The ratings of GIG reflect its excellent regional business profile, good risk-adjusted capitalisation, and track record of robust underwriting profitability. An offsetting rating factor is the execution risk associated with GIG’s inorganic expansion strategy.
GIRI is a composite insurer with a leading position in the Kuwaiti insurance market. The company is strategically important to GIG and strongly integrated into its operations. Accordingly, GIRI receives full rating enhancement from its parent company.
GIG is amongst the largest and most diversified insurance operators in the Middle East and North Africa region, with strong market positions in Kuwait, Jordan, Bahrain and Egypt. The group also has interests in Syria, Iraq, Saudi Arabia, Algeria, Turkey and the United Arab Emirates. In 2016, GIG grew its gross written premium by 14% to KWD 217 million (USD 710 million), driven by the implementation of medical insurance for retirees in Kuwait (the Afya medical scheme). Significant growth is further expected in 2017, stemming from the first full year of premium revenue from Afya, as well as inorganic growth from acquisitions in Turkey and Bahrain.
GIG’s risk-adjusted capitalisation remains good, despite the company suffering foreign exchange translation losses in Egypt, which drove down capital and surplus by 9% to KWD 83 million (USD 273 million) at year-end 2016. Whilst GIG’s risk-adjusted capitalisation is anticipated to be negatively impacted by increased capital requirements stemming from its inorganic expansion strategy, A.M. Best expects management to take appropriate actions to maintain capitalisation at a level supportive of the ratings over the cycle.
GIG has a track record of solid results, underpinned by robust underwriting profitability and stable investment returns. Despite elevated levels of competition in its operating markets, GIG has delivered an excellent five-year (2012-2016) average combined ratio of 87%, which was complemented by an average investment return of 4% over the same period. As a result, GIG has produced a strong average return on equity of 17% over the past five years.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper [..].
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