LONDON--(BUSINESS WIRE)--A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Alliance Insurance (PSC) (Alliance) (United Arab Emirates). The outlook for both ratings remains stable.
The ratings reflect Alliance’s strong risk-adjusted capitalisation, excellent level of underwriting performance and moderate business profile.
Alliance maintains a strong capital position benefiting from low underwriting leverage, a conservative investment profile and a reinsurance programme of good credit quality. Moreover, Alliance’s internal capital generation has outpaced capital requirements in recent years further strengthening its capital base.
Alliance has demonstrated a good track record of profitability, with overall earnings reaching AED 41 million (USD 11 million) in 2012, equivalent to a return on capital and surplus of 12%. Alliance’s profitability is supported by a solid underwriting performance, with life insurance producing a 13% profit margin and non-life achieving a strong combined ratio of approximately 60%. Furthermore, Alliance’s profitability is supplemented by a conservative and stable investment profile yielding a 4.7% return in 2012.
Despite Alliance’s weakening market profile in recent years, the company maintains a good position as a medium-sized insurer within the United Arab Emirates. Alliance’s new management team is taking measures to improve its market profile through developing its distribution network and restructuring its product offerings. Alliance will be challenged over the next two years to grow its market franchise, while maintaining strong profitability.
Negative rating pressures could arise from a material deterioration in Alliance’s financial performance or risk-adjusted capitalisation. Positive rating movement is unlikely in the near term.
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.
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.
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.