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FOR IMMEDIATE RELEASE
LONDON - JANUARY 14, 2016 11:19 AM (EST)
A.M. Best has removed from under review with negative implications and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Kuwait Reinsurance Company K.S.C.P. (Kuwait Re) (Kuwait). The outlook assigned to both ratings is stable.
The rating actions follow an assessment of the financial strength of Kuwait Re’s new parent company, Al Ahleia Insurance Company S.A.K.P. (AAIC), following the acquisition of the majority of shares in Kuwait Re to bring its ownership to 91.74%. AAIC’s rating fundamentals of strong risk-adjusted capitalisation, excellent track record of technical performance and leading domestic market profile are sufficient that AAIC is not expected to create financial strain on its subsidiary.
A.M. Best expects the change in ownership to have minimal effect on Kuwait Re’s operations with the company maintaining its existing management and strategic direction. Kuwait Re’s rating fundamentals remain sound, with the company’s strong risk-adjusted capitalisation supported by an expected combined ratio below 95% for 2015, an improvement over recent years.
AAIC has a leading position in the Kuwaiti insurance market and its profile is enhanced in terms of scale and diversification by the integration of Kuwait Re. Gross written premiums are expected to double as a result of the transaction, and the combined business will benefit from Kuwait Re’s geographically diversified underwriting portfolio. While AAIC has an excellent record of underwriting profitability with an average combined ratio of 52% over five years, Kuwait Re’s performance is weaker due to intense competition in the international reinsurance market. AAIC’s consolidated technical performance is expected to have a combined ratio in the range of 85-90% over the medium term. AAIC’s prospective level of risk-adjusted capitalisation is expected to remain strong.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
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 visit A.M. Best’s Ratings & Criteria Center.
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