AM Best


AM Best Affirms Credit Ratings of First Insurance Company


CONTACTS:

Jessica Botelho, CA
Financial Analyst
+44 20 7397 0310
jessica.botelho@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 01:12 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 First Insurance Company (FIC) (Jordan). The outlook of the FSR is stable, while the outlook of the Long-Term ICR is positive.

The ratings reflect FIC’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 benefit from rating enhancement, reflecting FIC’s strategic importance to its ultimate parent company, Solidarity Group Holding BSC (c), a leading provider of Islamic insurance solution in Bahrain and Jordan. The positive outlook of the Long-Term ICR reflects the potential benefits of the Solidarity group’s enhanced business profile following the successful integration of Al Ahlia Insurance Company B.S.C. into its operations.

FIC’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), excellent level of liquidity and the absence of borrowings. The balance sheet strength assessment also considers FIC’s high dependence on reinsurance and the elevated asset risk stemming from the company’s investment portfolio, which is composed of assets concentrated in Jordan and the Gulf Corporation Council.

FIC has a track record of adequate operating performance, demonstrated by a five-year (2013-2017) weighted average return on equity of 5.6%, supported by stable underwriting and investment performance. Despite challenges experienced across Jordan’s insurance market with the mandatory motor third-party liability book, the company achieved a combined ratio of 94.1% in 2017, which is largely in line with the five-year (2013-2017) weighted average of 93.8%, as calculated by AM Best. Headwinds for prospective profitability include the performance of the mandatory motor third-party liability book, which FIC will look to offset with the continued profitability on its other key lines of business including medical and marine.

FIC benefits from a good position in its domestic market, as the fourth-largest insurer, underpinned by a strong distribution network. Over recent years, the company has consistently grown at a faster pace than its market peers, with a five-year (2013-2017) compound average growth rate of approximately 13% (approximately 6% for the market), leading to gross written premiums of JOD 39.6 million in 2017. However, the company’s business profile remains constrained by its concentration in Jordan, which remains a relatively small and very competitive insurance market.

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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AMB# Company Name
091584 First Insurance Co
091321 Solidarity Group Holding BSC (c)