Press Release - MAY 26, 2016
A.M. Best Affirms Ratings of Arab Orient Insurance Company
| ||Thomas Bateman |
Associate Financial Analyst
+44 20 7397 0329
+44 20 7397 0325
Manager, Public Relations
+1 908 439 2200, ext. 5159
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
FOR IMMEDIATE RELEASE
LONDON - MAY 26, 2016
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of Arab Orient Insurance Company (gig Jordan) (Jordan). The outlook for each rating remains stable.
The ratings reflect gig Jordan’s leading position in its domestic market, robust operating performance and sound risk-adjusted capitalisation. Offsetting rating factors are the company’s domestically concentrated business profile and the high level of economic and financial system risks associated with operating in Jordan. The company’s ratings receive enhancement from its parent company, Gulf Insurance Group K.S.C.P. due to its strategic importance to the group.
In 2015, gig Jordan consolidated its market-leading position, achieving 8% growth in gross written premium to JOD 107 million (USD 151 million), with market share rising marginally to 19%. gig Jordan’s portfolio continues to be heavily concentrated toward medical and motor risks, which is a market characteristic in Jordan; together these lines accounted for 82% and 94% of the company’s gross and net written premium in 2015, respectively.
The company has demonstrated strong underwriting profitability, generating combined ratios below 90% over the past five years. Solid underwriting performance is supported by a conservative investment strategy that produces a stable return, yielding approximately 4% in 2015. gig Jordan generated overall earnings of JOD 4.4 million (USD 6.2 million) in 2015.
The company maintained sound risk-adjusted capitalisation in 2015, driven by good internal capital generation and its conservative investment strategy. gig-Jordan’s capital consumption is principally driven by its exposure to reinsurance counterparty credit risk, emanating particularly from large property risks that are ceded to the international market. This is, however, partially mitigated by a well-rated reinsurance panel. When stressed for the company’s exposure to catastrophic perils, risk-adjusted capitalisation falls to a marginal level, but remains supportive of the current ratings.
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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