Press Release - JANUARY 30, 2020

AM Best Revises Issuer Credit Rating Outlook to Positive for Noor Takaful General PJSC

 Algirdas Karvelis
Financial Analyst
+44 20 7397 0311

Salman Siddiqui
Director, Analytics
+44 20 7397 0331

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of “bb” of Noor Takaful General PJSC (NTG) (United Arab Emirates). The outlook of the FSR remains stable.

The ratings reflect NTG’s balance sheet strength, which AM Best categorises as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).

The positive outlook for the Long-Term ICR reflects the ongoing strengthening of NTG’s ERM capabilities. The company historically operated with sound silo risk management practices; however, in recent years, NTG has undertaken steps to establish an enterprise-wide risk-aware culture and implement tools to manage its risk exposures consistently. AM Best expects that further anticipated improvements will lead to an ERM framework that is appropriate given the scale and complexity of NTG’s operations.

NTG’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). However, prospective risk-adjusted capitalisation is susceptible to volatility given NTG’s small capital base. The balance sheet strength assessment also considers NTG’s conservative investment portfolio and its proven financial flexibility in the form of capital injections.

NTG’s business profile is limited as a result of the small size of its portfolio and its concentration within the UAE’s non-life takaful insurance market. Due to its size and position as a relatively new player in its domestic market, the company’s operating performance has been volatile with underwriting losses reported in four of the past five years (2014 – 2018) and an average non-life combined ratio over the same period of 110% (as calculated by AM Best). However, following a period of targeted growth in profitable segments, the company’s technical performance has improved, with NTG reporting a combined ratio of 96% in 2018 (2017: 100%). Further improvements were demonstrated in the first nine months of 2019, with the loss ratio improving to 44% from 50% at year-end 2018. The company recorded a net profit of AED 6.0 million for the first nine months of 2019 (same period 2018: AED 1.9 million).

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 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 credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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AMB# Company Name
090591 Noor Takaful General PJSC