A.M. Best Places Credit Ratings of Solidarity General Takaful BSC (c) and First Insurance Company Under Review With Positive Implications

LONDON--(BUSINESS WIRE)-- A.M. Best has placed under review with positive implications the Financial Strength Ratings of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb” of Solidarity General Takaful BSC (c) (SGT) (Bahrain) and First Insurance Company (FIC) (Jordan).

SGT and FIC are subsidiaries of Solidarity Group Holding BSC (c) (SGH), operating in Bahrain and Jordan, respectively, and form part of the Solidarity group. The Credit Rating (rating) actions follow the successful completion of SGH’s acquisition of a 71% stake in Al Ahlia Insurance Company BSC (AAIC) on 27 December 2016. SGH acquired 44 million AAIC shares at a price of BD 0.242 per share, for a total consideration of BD 11 million (USD 28 million). Solidarity is a geographically diverse takaful group operating in the Middle East, whilst AAIC is a mid-tier conventional insurance company in Bahrain. A.M. Best notes that SGH intends to convert AAIC’s licence and operations from conventional to takaful. Subsequent to the conversion, SGT’s portfolio is expected to be transferred to AAIC, maintaining AAIC’s public listing on the Bahraini Bourse, and AAIC’s brand is expected to be aligned with the Solidarity group. The newly merged entity is anticipated to have a leading position in the domestic market in Bahrain, enhancing the Solidarity group’s business profile.

The under review with positive implications status reflects the potential positive benefits of the transaction on the Solidarity group’s competitive position resulting from SGT’s increased market profile in Bahrain. Whilst A.M. Best acknowledges the Solidarity group’s track record of successfully integrating a conventional insurance acquisition into FIC in Jordan, any positive rating movement on SGT or FIC resulting from the AAIC’s acquisition remain subject to the execution risk associated with its integration into the Solidarity group given the complexity, size and scope of the transaction.

A.M. Best will continue to monitor the impact of the transaction on the Solidarity group’s ratings fundamentals and expects the under review with positive implications status to be resolved following the successful execution of SGT’s portfolio transfer to AAIC, and full integration of the new operations into the group.

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.

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A.M. Best

Salman Siddiqui, ACA, +44 20 7397 0311

Senior Financial Analyst

salman.siddiqui@ambest.com

or

Ghislain Le Cam, CFA, FRM, +44 20 7397 0268

Associate Director, Analytics

ghislain.lecam@ambest.com

or

Christopher Sharkey, +1 908 439 2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, +1 908 439 2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com

Source: A.M. Best