AM Best Affirms Credit Ratings of Bahrain Kuwait Insurance Company B.S.C.
LONDON, October 11, 2023--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of "a-" (Excellent) of Bahrain Kuwait Insurance Company B.S.C. (GIG Bahrain) and its subsidiary, Takaful International Company BSC (GIG Bahrain Takaful), both of which are domiciled in Bahrain. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect GIG Bahrain’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in lift from GIG Bahrain’s parent company, Gulf Insurance Group K.S.C.P., due to the strategic importance of GIG Bahrain to the group.
GIG Bahrain Takaful’s ratings consider its strategic importance to GIG Bahrain. GIG Bahrain Takaful provides a platform to underwrite takaful business domestically and increases the overall operation’s market share and product offerings in Bahrain. Following its acquisition by GIG Bahrain, GIG Bahrain Takaful has reported improved technical results.
GIG Bahrain’s balance sheet strength is underpinned by risk-adjusted capitalisation that was at the strongest level at year-end 2022, as measured by Best’s Capital Adequacy Ratio (BCAR). GIG Bahrain benefits from a relatively conservative asset allocation and a reinsurance programme placed mostly with reinsurers of good credit quality, which mitigates the elevated credit risk associated with the company’s high cessions on commercial risks. AM Best expects GIG Bahrain’s risk-adjusted capitalisation to be managed at the strongest level over the company’s forecast period.
GIG Bahrain’s strong operating performance is demonstrated by a five-year (2018-2022) weighted average return-on-equity ratio of 9.5%, as calculated by AM Best, with earnings over this period supported by underwriting and investment results. GIG Bahrain’s underwriting profitability continues to support overall earnings, generating positive returns on the non-life account over the past five years, evident by a five-year (2018-2022) weighted average combined ratio of 93.7%, as calculated by AM Best. AM Best expects the company’s prospective underwriting performance to remain strong.
GIG Bahrain commands a leading position in Bahrain’s insurance market and a strong competitive position in Kuwait. The company maintains an excellent domestic franchise, which has been strengthened following its acquisition of GIG Bahrain Takaful. The company writes a well-diversified portfolio on a gross premium basis; although a concentration to motor and medical business is noted on a net premium basis.
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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Emily Thompson
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