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FOR IMMEDIATE RELEASE
LONDON - NOVEMBER 22, 2017 01:36 PM (EST)
A.M. Best has downgraded the Long-Term Issuer Credit Rating to “bbb” from “bbb+” and affirmed the Financial Strength Rating of B++ (Good) of Emirates Retakaful Limited (ERL) (United Arab Emirates). Concurrently, A.M. Best has placed these Credit Ratings (ratings) under review with negative implications.
These rating actions follow an announcement by ERL regarding a potential sale of the company and changes in the senior management team. ERL has announced that its CEO and CFO have resigned and will be leaving the company after their six-month notice periods. The under review with negative implications status reflects uncertainty regarding the future shareholding structure, management team and strategy of ERL. The downgrade reflects the company’s failure to meet A.M. Best’s expectations, in addition to ERL’s declining business profile.
ERL continues to operate a well-diversified portfolio geographically and by line of business, however, the company lacks scale and has struggled with growth in what remains a soft global reinsurance market. ERL reported a significant contribution adjustment at year-end 2016, which gave rise to concern over the company’s internal control environment. Gross written contributions are expected to be circa USD 70 million by year-end 2017.
The ratings will likely remain under review, pending further information on the company’s ownership structure, senior management team and long-term business strategy.
This press release relates to Credit Ratings 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 see A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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