Best’s News & Research Service - December 09, 2019 02:47 PM (EST)
AM Best Comments On Credit Ratings of ARABIA Insurance Company s.a.l.
- December 09, 2019 02:47 PM (EST)
London //BestWire// - AM Best has commented that the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of ARABIA Insurance Company s.a.l. (AIC) (Lebanon), both with a negative outlook, remain unchanged despite the increased social, political and economic uncertainty in Lebanon.
In October 2019, demonstrations spread across Lebanon, rapidly leading to the resignation of the government. Since then, political and economic uncertainty has increased significantly, with a slowdown in capital inflows causing, in some instances, cash flow constraints to the economy.
Although AIC is domiciled in Lebanon, it is somewhat insulated from the heightened political and economic risk in the country. It operates through a network of branches and subsidiaries across nine countries in the Middle East, providing the group with good diversification. In 2018, approximately 14% of AIC’s gross written premium were generated in Lebanon, whilst the proportion of the group’s cash and deposits held domestically amounted to only 16% as at year-end. Furthermore, in the first nine months of 2019, in response to increasing political and economic uncertainty in Lebanon, AIC implemented several risk management measures. As a result, AM Best considers AIC to have a limited exposure to Lebanon.
AM Best will continue to monitor how events unfold in Lebanon and any impact the heightened social, political and economic risks have on AIC.
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 Understanding 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 provider specialising in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.