A.M. Best Affirms Credit Ratings of Alliance Insurance (PSC)

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Alliance Insurance (PSC) (Alliance) (United Arab Emirates). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Alliance’s strong risk-adjusted capitalisation, solid earnings and moderate business profile.

Alliance maintains strong risk-adjusted capitalisation that benefits from low underwriting leverage, a conservative investment portfolio and a reinsurance program of good credit quality. A.M. Best expects internal capital generation from strong underwriting performance to adequately support strategic initiatives, as the company grows its franchise over the coming years. Alliance also benefits from an unleveraged balance sheet and excellent liquidity.

Alliance has demonstrated a track record of excellent profitability, with overall earnings reaching AED 45 million (USD 12 million) in 2016, equivalent to a return on equity of 10%. Alliance’s earnings are supported by a solid underwriting performance, with life business generating a 14% gross profit margin and the non-life segment’s combined ratio improving to 69% in 2016. Furthermore, Alliance’s profitability is supplemented by a conservative and stable investment profile that yielded a 5% return.

Alliance is a medium-size composite insurance company operating in the United Arab Emirates. The company has a modest but balanced profile, providing life and general insurance products. Alliance’s premium retention on non-life business remains low, emphasising its high level of reinsurance dependence. Overall gross premiums declined marginally by 1.5% in 2016, to AED 301 million (USD 82 million), reflecting portfolio cleansing as well as the highly competitive insurance market in the UAE.

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 Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Borja Cubillo
Financial Analyst

+44 20 7397 0306

borja.cubillo@ambest.com

or

Salman Siddiqui, ACA

Associate Director, Analytics

+44 20 7397 0331

salman.siddiqui@ambest.com

or

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

or

Jim Peavy
Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: A.M. Best