These Credit Ratings (ratings) reflect AIC’s balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The negative outlooks reflect pressures on AIC’s balance sheet strength assessment stemming from increasing financial leverage and limited fungibility of capital across the group.
AIC’s balance sheet strength is underpinned by risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level, owed primarily to the consolidation of Arabia Falcon Insurance Company SAOG (Falcon) (
Prior to 2017, AIC experienced weak operating performance, driven by poor technical results. In 2017, AIC underwent a strategic shift to enhance profitability through a stricter underwriting approach and cost efficiencies. The remedial actions taken by the company have improved results with AM Best expecting these to stabilise at an adequate level in the medium term.
AIC has one of the most geographically diverse underwriting portfolios in the
AM Best considers regulatory risk as one of AIC’s greatest threats given the group’s operating model. The appropriate ERM assessment takes into account expectations that AIC will continue to develop its risk management framework to adapt to the evolving nature of its markets in a sustainable way.
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.
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Source: AM Best