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FOR IMMEDIATE RELEASE
LONDON - AUGUST 14, 2014 10:33 AM (EDT)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Alliance Insurance (PSC) (Alliance) (United Arab Emirates). The outlook for both ratings remains stable.
The ratings reflect Alliance's strong risk-adjusted capitalisation, excellent overall profitability and moderate business profile.
Alliance maintains a strong risk-adjusted capitalisation that benefits from low underwriting leverage, a conservative investment portfolio and a reinsurance program of good credit quality. Internal capital generation from strongly performing underwriting operations is likely to adequately support increasing capital requirements as the company grows its franchise over the coming years.
Alliance has demonstrated a good track record of profitability, with overall earnings reaching AED 44 million (USD 12 million) in 2013, equivalent to a return on capital and surplus of 12%. Alliance's profitability is supported by a solid underwriting performance, with life business producing a 14% gross profit margin and non-life achieving a strong combined ratio of 55%. Furthermore, Alliance's profitability is supplemented by a conservative and stable investment profile that yielded a 4.7% return in 2013.
Alliance is a medium-size composite insurance company operating in the United Arab Emirates. The company has a balanced profile providing life and general insurance products. Alliance's premium retention on non-life business remains low, emphasising its high level of reinsurance dependence.
Negative rating pressures could arise from a material deterioration in Alliance's financial performance and/or risk-adjusted capitalisation. Positive rating movement is unlikely in the near term.
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.