AM Best


AM Best Affirms Credit Ratings of Solidarity Bahrain B.S.C.


CONTACTS:

Aneela Mather-Khan, CA
Financial Analyst
+44 20 7397 0319
aneela.mather-khan@ambest.com

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

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

LONDON - DECEMBER 12, 2018 01:16 PM (EST)
AM Best has affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of Solidarity Bahrain B.S.C. (Solidarity Bahrain) (Bahrain). The outlook of the FSR is stable, while the outlook of the Long-Term ICR is positive.

The Credit Ratings (ratings) reflect Solidarity Bahrain’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating enhancement, reflecting Solidarity Bahrain’s strategic importance to its ultimate parent company, Solidarity Group Holding BSC (c) (SGH), a leading provider of Islamic insurance solutions in Bahrain and Jordan.

The positive Long-Term ICR outlook reflects the potential benefits of an enhanced business profile of the Solidarity group following the integration of Al Ahlia Insurance Company B.S.C. (AAIC) (Bahrain) into its operations.

Solidarity Bahrain’s balance sheet strength is underpinned by its risk-adjusted capitalisation being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), good liquidity and financial flexibility, with access to the debt and the equity markets. The assessment also factors in the company’s high reinsurance dependence and the elevated asset risk stemming from its investment portfolio, which is concentrated in Bahrain and the Gulf Corporation Council.

AM Best expects Solidarity Bahrain’s operating performance to remain adequate, benefitting from corrective actions taken by management to improve the profitability of AAIC’s legacy operations through strengthened underwriting practices and more stringent risk selection. Furthermore, de-risking of Solidarity Bahrain’s investment portfolio is expected to result in greater earnings stability over the medium term.

Solidarity Bahrain was formed following the merger between AAIC and Solidarity General Takaful BSC (c) on 3 December 2017, creating a leading insurer in the Bahraini insurance market by gross written contribution. However, Solidarity Bahrain’s business profile remains limited by its concentration in Bahrain’s insurance market, which is relatively small and highly competitive.

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


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