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FOR IMMEDIATE RELEASE
LONDON - MAY 26, 2016 10:43 AM (EDT)
A.M. Best has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit ratings to “a” from “a-” of Gulf Insurance Group K.S.C.P. (GIG) and its subsidiary, Gulf Insurance and Reinsurance Company K.S.C. (Closed) (GIRI) (both domiciled in Kuwait). The outlook for each rating has been revised to stable from positive.
The upgrade reflects GIG’s strengthened risk-adjusted capitalisation, excellent regional business profile, track record of robust underwriting profitability and improved risk management.
GIRI is a composite insurer with a leading position in the Kuwaiti insurance market. The company is strategically important to GIG’s profile and is strongly integrated into its operations. Accordingly, GIRI receives a full rating enhancement from its parent company.
GIG is amongst the largest and most diversified insurance groups in the Middle East and North Africa region, with strong market positions in Kuwait, Jordan, Bahrain and Egypt. Furthermore, the group has interests in Syria, Iraq, Saudi Arabia, Algeria and the United Arab Emirates. In 2015, GIG grew its gross premium written by 7.1% to KWD 189 million (USD 625 million). Significant growth is expected in 2016, driven by GIRI securing a Kuwaiti government tender to provide health insurance to local retirees. The program is expected to result in a premium windfall of KWD 83 million (USD 272 million).
GIG’s risk-adjusted capitalisation has gradually improved in recent years. A.M. Best anticipates that prospective risk-adjusted capitalisation will remain supportive of the ratings, maintaining a sufficient buffer for the company’s expected growth over the next few years. GIG has demonstrated a track record of strong operating results, with an excellent five-year average combined ratio below 90%, which was complemented by stable investment returns. GIG has produced a return on equity of 15.9% over the past five years.
GIG has a comprehensive risk management framework, with a well-defined risk appetite statement. The company has developed appropriate tools and processes to identify, measure, manage and monitor risks across its subsidiaries. These include internal assessments of capital requirements at group and subsidiary level, catastrophe exposures and counter-party credit risk. Economic capital is managed to ensure that sufficient internal capital is generated to support the company’s initiatives.
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 see A.M. Best’s Recent Rating Activity web page.
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