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FOR IMMEDIATE RELEASE
LONDON - JUNE 10, 2016 08:58 AM (EDT)
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of Dubai Insurance Company (PSC) (DIC) (United Arab Emirates). The outlook for each rating remains positive.
The ratings reflect DIC’s excellent technical performance, very strong risk-adjusted capitalisation and improving enterprise risk management (ERM).
DIC has a track record of excellent technical performance. The company reported a technical profit of AED 23.4 million (USD 6.4 million) in 2015, compared with AED 19.7 million (USD 5.4 million) in 2014. DIC’s underwriting operations, including medical business, generated an exceptional five-year average combined ratio of 78.2% (2011-2015). In addition, the company has reported an improved technical profit of AED 9.4 million (USD 2.6 million) for the first three months of 2016, compared with AED 8.0 million (USD 2.2 million) for the same period in 2015. DIC has maintained excellent underwriting performance despite prevailing competitive market conditions in the UAE, with significant pressure on premium rates across most lines of business. A.M. Best expects DIC’s prudent approach to risk selection and focus on profitability over top-line growth to support strong future technical performance.
The company’s risk-adjusted capitalisation remained at a very strong level in 2015. Whilst DIC has a concentrated investment portfolio, with movements in the fair value of its equity holdings creating volatility in capital and surplus, the company maintains an adequate buffer in capital adequacy to absorb these fluctuations. Prospective risk-adjusted capitalisation is expected to remain very strong, supported by good internal capital generation and controlled underwriting growth.
DIC’s approach to ERM has improved notably over the past two years. The company has strengthened its identification and quantification of key risks and imposed greater controls to mitigate and reduce the potential impact on earnings and risk-adjusted capitalisation. DIC has a strong understanding of capital management and performs stress testing exercises to assess the impact of underwriting and investment risks on its balance sheet.
The company’s gross written premium base surpassed AED 362.0 million (USD 98.8 million) in 2015, ranking the company as a mid-tier player within the UAE insurance market. DIC’s franchise continues to benefit from access to business through its shareholders and affiliated companies.
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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