A.M. Best Assigns Ratings to Muscat Life Assurance Company SOAC
LONDON--(BUSINESS WIRE)--A.M. Best has assigned a financial strength rating of B+ (Good) and issuer credit rating of "bbb-" to Muscat Life Assurance Company SOAC (MLAC) (Oman). The outlook assigned to both ratings is stable.
The ratings reflect MLAC's strong level of risk-adjusted capitalisation and sound track record of operating performance. An offsetting rating factor is the company’s weak market profile in a highly competitive domestic market. The ratings of MLAC receive rating enhancement from its parent company, Muscat National Holding Company SAOG (MNHC), given MLAC’s strategic importance to the group.
MLAC's risk-adjusted capitalisation is expected to remain strong over the medium term. The company’s capital position is supported by low underwriting leverage and a reinsurance panel of sound financial strength.
MLAC has demonstrated a robust track record of operating performance, with sound underwriting results and stable investment returns producing a five-year average return on capital of 13.3%. MLAC has a weak business profile with OMR 3.6 million (USD 9.4 million) of gross written premium in 2012, reducing to approximately OMR 1 million (USD 2.5 million) in 2013 following the loss of a major group life contract.
Upward rating movement is unlikely at present. Downward rating movement could arise if the company’s competitive position were to further deteriorate or if there were a revision of MLAC’s strategic importance to the group.
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.