A.M. Best Affirms Credit Ratings of Qatar Islamic Insurance Company Q.S.C.
The ratings reflect QIIC’s balance sheet strength, which
QIIC adopts a hybrid takaful model, whereby the shareholders’ fund (SHF) charges the policyholders’ fund (PHF) a Wakala fee based on gross written contributions (GWC) and a Muderaba fee based on investment income. QIIC’s ability to accumulate surpluses within the PHF whilst regularly distributing surplus back to policyholders supports the sustainability of the takaful model.
On a combined basis, incorporating the PHF and SHF, capital requirements are heavily weighted towards asset risk due to the company’s high risk and concentrated investment composition. Despite this, the company’s level of risk-adjusted capitalisation remains at the strongest level as measured by Best’s Capital Adequacy Ratio (BCAR) model. Offsetting factors include the company’s moderate reliance on reinsurers and a weak reserving process. The PHF is considered to be sufficiently capitalised on a standalone basis, supported by
QIIC has a track record of strong operating and technical profitability, highlighted by a five-year average (2013 - 2017) combined ratio of 79% that has remained very stable over recent years. While there has generally been a good balance of earnings between technical and investment income, a volatile investment environment in
Although the company is concentrated to its domestic market of
Whilst, QIIC’s ERM framework is considered appropriate,
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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