A.M. Best Affirms Credit Ratings of Dubai Insurance Company (PSC)
The ratings reflect DIC’s balance sheet strength, which
DIC’s balance sheet strength is assessed as very strong, underpinned by risk-adjusted capitalisation at the strongest level, with Best’s Capital Adequacy Ratio (BCAR) scores comfortably in excess of 50% at the 99.6% confidence level. The company’s ability to retain earnings, strong liquidity, and prudent reserving that incorporates buffers over the actuarial best estimate, further support the balance sheet strength. An offsetting rating factor is the heightened potential volatility in capital and surplus caused by movements in the fair value of DIC’s equity holdings, although the company maintains an adequate capital buffer to absorb these fluctuations. The balance sheet strength assessment also factors in DIC’s relatively high dependence on reinsurance, as evidenced by a retention ratio of approximately 29% in 2017. The associated elevated counter-party risk is, however, mitigated partially by the use of a strong reinsurance panel.
DIC has a track record of solid operating performance as demonstrated by an excellent five-year (2013-2017) weighted average combined operating ratio of 78.4%. The company reported a technical profit of AED 28.6 million (
DIC has successfully managed to enhance its market position in a highly competitive market without compromising technical profitability, mainly achieved through prudent risk selection and the improvements in claims management processes.
DIC is a mid-tier insurer solely operating in the
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
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