AM Best Affirms Credit Ratings of Arab Reinsurance Company S.A.L.
The ratings reflect Arab Re’s balance sheet strength, which AM Best categorises as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The negative outlooks reflect ongoing pressure on the business profile assessment, stemming from AM Best’s concerns over Arab Re’s ability to navigate the challenging underwriting conditions prevailing in its core markets. In addition, the increased social, political and economic instability in
Arab Re’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is maintained at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), reflective of low underwriting leverage. The company’s shareholder equity reached
Arab Re has a track record of marginal operating profitability, with a five-year (2014-2018) weighted average return-on-equity of 4% and return on premium of 8.3%. Whilst operating profit remains supported by good investment returns, the company has experienced weak technical performance in recent years, with ongoing difficult underwriting conditions resulting in a five-year weighted average combined ratio of 107.2%. Net income increased marginally to
Arab Re has a niche position in its core markets in the
This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data provider specialising in the insurance industry. The company does business in more than 100 countries. Headquartered in
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Source: AM Best
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