April 04, 2013 10:41 AM Eastern Daylight Time
A.M. Best Revises Outlook to Stable for National Life and General
Insurance Company SAOC
LONDON--(BUSINESS WIRE)--A.M. Best Europe – Rating Services Limited has revised the
outlook to stable from negative and affirmed the financial strength
rating of B++ (Good) and the issuer credit rating of “bbb” of National
Life and General Insurance Company SAOC (NLGIC) (Oman).
“Risk
Management and the Rating Process for Insurance Companies”
The rating actions reflect NLGIC’s supportive risk-adjusted
capitalisation, the improved technical performance on its non-life
business and its positive track record of operating performance.
NLGIC’s risk-adjusted capitalisation has improved in 2012 and remains
supportive of the company’s current ratings. In 2012, NLGIC's capital
and surplus increased to OMR 16 million (USD 41 million) from prior
year’s OMR 13 million (USD 33 million) as a result of NLGIC's improved
profitability and full profit retention. NLGIC’s risk-adjusted
capitalisation is supported by a sound panel of reinsurers with good
credit quality and a moderate level of investment risk. Offsetting
factors include NLGIC’s increasing business leverage, resulting from a
fast growing medical portfolio in Dubai and a higher retention ratio in
the motor business.
The performance of NLGIC’s non-life business has been improving since
2010 when the company decided to remove from its portfolio
underperforming policies and improve its claims management process.
Overall non-life technical losses declined to OMR 210,000 (USD 546,000)
in 2012 from an average loss of OMR 2 million (USD 3.3 million) in the
last three years.
NLGIC has a good track record of generating profits. Over two thirds of
NLGIC’s overall profitability is generated through the technical
account, owing to its solid domestic franchise in the medical and life
business. Additionally, NLGIC’s investment performance is stable and has
been generating good yield levels. At year-end 2012, profit-after-tax
totaled OMR 3.2 million (USD 8.3 million), up from OMR 1.2 million (USD
3.2 million) in 2011 and 130% higher than the previous three years
average of OMR 1.4 million (USD 3.6 million). Return on adjusted capital
and surplus was 22.4%.
Going forward, a deterioration in NLGIC’s operating performance or a
materially weaken risk-adjusted capitalisation level could negatively
impact the company’s ratings. Upward rating movements are unlikely over
the medium 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. Key criteria utilised include: “Risk
Management and the Rating Process for Insurance Companies”; “Evaluating
Country Risk”; and “Understanding Universal BCAR”. 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.
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