OCTOBER 14, 2021 10:22 AM (EDT)
AM Best Removes From Under Review, Affirms Credit Ratings of Gulf Ins Grp K.S.C.P. and Gulf Ins and Reinsur Co K.S.C. (Closed)
|William Keen-Tomlinson |
Senior Financial Analyst
+44 20 7397 4395
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Manager, Public Relations
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FOR IMMEDIATE RELEASE
LONDON - OCTOBER 14, 2021 10:22 AM (EDT)
AM Best has removed from under review with developing implications and affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of Gulf Insurance Group K.S.C.P. (GIG) and Gulf Insurance and Reinsurance Company K.S.C. (Closed) (gig-Kuwait) (both domiciled in Kuwait). The outlook assigned to the Credit Ratings (ratings) is stable.
The ratings reflect GIG’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
gig-Kuwait is a composite insurer with a leading position in Kuwait’s insurance market. The company is strategically important to GIG and strongly integrated into its operations.
GIG announced the completion of its acquisition of AXA Insurance (Gulf) B.S.C. (c) and AXA Cooperative Insurance Company (together, AXA Gulf) on 7 September 2021. Post-acquisition, GIG’s balance sheet benefits from pro-forma risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by a capital raise of KD 50 million to partly fund the acquisition of AXA Gulf. GIG also has a comprehensive reinsurance programme, supported by well-rated counterparties, and a relatively conservative investment strategy. Post-acquisition leverage is moderate, and the group has plans to reduce its adjusted leverage during the last quarter of 2021.
GIG is amongst the largest and most diversified insurance groups in the Middle East and North Africa region, with market leading positions in Kuwait, Jordan and Bahrain, and a strong footprint in Egypt, Turkey and Algeria. The AXA Gulf acquisition adds top five positions in Saudi Arabia, the United Arab Emirates, Qatar and Oman and bolsters the group’s competitive position in Bahrain. The group’s revenues are expected to reach approximately USD 2.5 billion in 2022, after fully consolidating AXA Gulf.
The group has demonstrated a track record of strong operating performance, returning a five-year (2016-2020) average return on equity of 13%, supported by solid investment returns and a five-year (2016-2020) average combined ratio of 96%. AM Best expects GIG’s operating performance to remain strong, bolstered by profitable books of business acquired through AXA Gulf.
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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.