Best’s News & Research Service - February 13, 2015 09:41 AM (EST)
A.M. Best Affirms Ratings of Muscat Life Assurance Company SAOC
- February 13, 2015 09:41 AM (EST)
London //BestWire// - A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of "bbb-" of Muscat Life Assurance Company SAOC (MLAC) (Oman). The outlook for both ratings is stable.
The ratings of MLAC reflect its strong risk-adjusted capitalisation and resilient operating performance. An offsetting rating factor is the company's weak business profile in the Oman insurance market. The ratings of MLAC receive rating enhancement from its parent company, Muscat National Holding Company SAOG (MNHC), reflecting MLAC's strategic importance to the group.
MLAC's risk-adjusted capitalisation remains strong and is expected to be supportive of the company's projected growth over the medium term. The company's capital position benefits from low underwriting leverage and a reinsurance panel of good credit quality. Capital requirements are primarily driven by the company's real estate holdings.
MLAC has demonstrated resilient operating performance despite its premium base shrinking materially, following the loss of its group credit life business written through a local bank. Although operating profits have diminished as a result of MLAC's weakening market profile, the company has continued to report pre-tax profits in each of the last five reported years (2009-2013). Earnings are also expected to remain positive for 2014.
Positive rating actions are unlikely in the short to medium term. Negative rating actions may arise if MLAC is unsuccessful in implementing its strategic initiatives to strengthen its market profile or if there is a revision in MLAC's strategic importance to the group.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilised:
- Catastrophe Analysis in A.M. Best Ratings
- Evaluating Country Risk
- Rating Members of Insurance Groups
- Risk Management and the Rating Process for Insurance Companies
- Understanding Universal BCAR
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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