A.M. Best Affirms Ratings of Abu Dhabi National Insurance Company P.S.C.

LONDON--()--A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Abu Dhabi National Insurance Company P.S.C. (ADNIC) (United Arab Emirates). The outlook for both ratings remains stable.

The ratings reflect ADNIC’s strong risk-adjusted capitalisation, established position in the United Arab Emirates (UAE) market, and consistently strong profitability.

ADNIC’s risk-adjusted capitalisation remains strong despite a gradual decline in recent years with capital requirements continuing to outpace internal capital generation. This is driven by ADNIC’s strategic decision to become a genuine risk carrier with higher retention across most business lines in addition to diversification of the investment portfolio from cash to fixed-income securities. Risk-adjusted capitalisation is sufficiently strong to absorb dividend payments of 50% of paid-up capital and average growth of 9% expected over the next three years.

ADNIC maintains a leading position within the UAE market with a diversified portfolio across the non-life and medical business segments. The company achieved a 5% growth rate in 2013, which increased premium revenue to AED 2.4 billion (USD 655 million).

ADNIC has demonstrated strong technical profitability with combined ratios consistently below 90%, primarily driven by good performance on commercial lines. The company’s earnings remain strong, with a net income of AED 181 million (USD 49 million) in 2013 compared to AED 145 million (USD 39 million) in 2012. ADNIC’s performance is expected to remain sound as it continues to tighten underwriting guidelines, particularly on medical business. For the first six months of 2014, ADNIC reported a profit of AED 104 million (USD 28 million), up 8% on the restated AED 97 million (USD 26 million) reported in 2013.

Upward rating movements are unlikely in the near term. Downward rating pressures could arise if there were a material or prolonged deterioration in ADNIC’s financial performance and/or risk-adjusted capitalisation.

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.

This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which 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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Aneela Mather, CA, +(44) 20 7397 0329
Associate Financial Analyst
aneela.mather@ambest.com
or
Ghislain Le Cam, CFA, +(44) 20 7397 0268
Associate Director, Analytics
ghislain.lecam@ambest.com
or
Chris Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Sharing

Contacts

A.M. Best
Aneela Mather, CA, +(44) 20 7397 0329
Associate Financial Analyst
aneela.mather@ambest.com
or
Ghislain Le Cam, CFA, +(44) 20 7397 0268
Associate Director, Analytics
ghislain.lecam@ambest.com
or
Chris Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com