The ratings reflect Arig’s balance sheet strength, which AM Best categorises as very strong, as well as its marginal operating performance, neutral business profile and marginal enterprise risk management (ERM).
The Long-Term ICR downgrade reflects a revision in AM Best’s assessment of the company’s operating performance to marginal from adequate. The company reported a net loss of
As a consequence of the operating losses, ARIG also suffered a material deterioration in the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), stemming from a reduced level of capital and surplus, which diminished from
The negative outlooks reflect the potential for further deterioration in the balance sheet strength in the medium-term and AM Best’s continuing concern with the company’s ERM. AM Best also notes the possible execution risk that could emanate from any change in business strategy implemented under the leadership of a new CEO, following the departure of the previous CEO in
The company continues to benefit from a strong brand in the Middle Eastern and North African reinsurance markets, built upon its excellent reputation and long-standing relationships with cedants. However, Arig faces heightened reputational risk with regard to the events that occurred in the past year.
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Source: AM Best