AM Best


A.M. Best Affirms Ratings of Emirates Insurance Company P.S.C.


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Aneela Mather
Associate Financial Analyst
+(44) 20 7397 0329
aneela.mather@ambest.com

Ghislain Le Cam, CFA
Associate Director, Analytics
+(44) 20 7397 0268
ghislain.lecam@ambest.com


Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
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james.peavy@ambest.com

FOR IMMEDIATE RELEASE

LONDON - JULY 17, 2014 10:25 AM (EDT)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Emirates Insurance Company P.S.C. (EIC) (United Arab Emirates). The outlook for both ratings remains stable.

The ratings reflect EIC's strong risk-adjusted capitalisation, good standing in the United Arab Emirates market and consistently strong profitability. An offsetting rating factor is EIC's concentrated investment profile heavily weighted toward domestic equities.

EIC's risk-adjusted capitalisation remains robust, benefiting from low underwriting leverage and a reinsurance programme of good credit quality. Capital requirements are driven by EIC's exposure to domestic equities, which accounted for 50% of invested assets at year-end 2013. The company's risk-adjusted capitalisation is sufficiently strong to absorb expansion into inward facultative business, increased premium retention and volatility generated by its investment portfolio.

EIC maintains a leading position in the United Arab Emirates. After a period of stagnation, EIC's diversification into facultative inward reinsurance business in the Afro-Asian region has enabled it to record an increase in its gross written premium of 12% to AED 721 million (USD 196 million) in 2013. Given the strategic shift in its profile, EIC needs to ensure that this new business segment is adequately controlled and managed.

EIC has demonstrated a track record of strong technical profitability with loss ratios consistently below 60%, primarily driven by the motor, property and engineering business lines. Despite a change in the business mix resulting in higher acquisition costs, the company's technical result improved to AED 50 million (USD 13.7 million), with a return on equity remaining sound at 9.4% in 2013. EIC's investment profile remains highly exposed to equity investments, which can be a source of volatility for its capital position and operating performance.

Upward rating movements are unlikely at present. Downward rating pressures could arise if there were a material decline in EIC's risk-adjusted capitalisation and/or a prolonged deterioration in its financial performance.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures:A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This rating announcement has been issued by A.M. Best Europe - Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.


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AMB# Company Name
085401 Emirates Insurance Company P.J.S.C.