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FOR IMMEDIATE RELEASE
LONDON - APRIL 17, 2015 09:03 AM (EDT)
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of First Insurance Company (FIC) (Jordan) following its acquisition of a controlling stake in Yarmouk Insurance Company (Yarmouk) (Jordan). The outlook for both ratings remains stable.
On 2 April 2015, FIC acquired a controlling stake (76%) in Yarmouk Insurance Company (Yarmouk) in Jordan. The transaction, which was completed on the Amman Stock Exchange and estimated at USD 15 million, is one of the largest in the region in recent times. The acquisition will broaden FIC's business profile and provide the company with access to the Jordanian life insurance market.
Although the risk-adjusted capitalisation of FIC is expected to decrease in the short term as a result of the transaction, A.M. Best anticipates it will remain solid and supportive of the current ratings. Furthermore, A.M. Best expects FIC's capital position to increase in the next couple of years, driven by resilient internal capital generation.
FIC expects to merge Yarmouk's operations with its own over the next few months. During this transition period, A.M. Best will continue to monitor closely the rating fundamentals of the company.
Upward rating movement is unlikely over the medium term. Downward rating pressure could occur if there is a substantial deterioration in FIC's risk-adjusted capitalisation or 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.
Key insurance criteria reports utilised:
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 press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best's Ratings & Criteria Center .
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