The rating downgrades consider MEICO’s marginal level of risk-adjusted capitalisation, reflecting an investment portfolio that is concentrated in local real estate and equities, which together accounted for over 90% of the company’s total investments at year-end 2015. Management has taken actions to de-risk the company’s balance sheet, including the disposal of real estate investments, and whilst the company has realised significant gains during the first half of 2016, there has only been a modest improvement in risk-adjusted capitalisation. Internal capital generation has been limited in the past by an onerous dividend policy, and the concentrated investment portfolio, coupled with a slim capital buffer, exposes the company’s risk-adjusted capitalisation to potential volatility. In addition, the company remains exposed to the economic and financial system risks associated with
MEICO has generated operating profits in each year since inception, equally supported by investment income and technical results. In 2015, underwriting profits rose 3% to JOD 1.9 million (
MEICO remains one of the leading insurers in
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