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FOR IMMEDIATE RELEASE
LONDON - APRIL 17, 2020 01:42 PM (EDT)
AM Best has placed under review with negative implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Arab Reinsurance Company S.A.L. (Arab Re) (Lebanon).
The ratings reflect Arab Re’s balance sheet strength, which AM Best categorises as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The ratings have been placed under review with negative implications, as AM Best needs time to assess the impact that the weakening of the economic and financial conditions in Lebanon and the country’s recent default could have on the company. Geographically, Arab Re has a relatively well-diversified investment portfolio but maintains exposure to Lebanon, with approximately half of its assets held domestically. In particular, Arab Re is exposed to Lebanese government bonds and to the domestic banking sector, through cash and bank deposits. The risk associated with these assets has increased considerably in recent months following the deterioration of Lebanon’s economic situation.
AM Best will closely monitor events in Lebanon, and aim to resolve the under-review status once there is more clarity as to their impact on Arab Re’s credit profile.
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.