LONDON--(BUSINESS WIRE)--A.M. Best has removed from under review with negative implications and downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit rating to “bbb-” from “bbb” of Trade Union Cooperative Insurance Company – A Saudi Joint Stock Company (TUCI) (Saudi Arabia). The outlook assigned to the ratings is negative. Concurrently, A.M. Best has withdrawn the ratings due to managements’ request to no longer participate in A.M. Best’s interactive rating process.
The rating actions reflect the deterioration in TUCI’s risk-adjusted capitalisation over the past year. During 2013, underwriting losses eroded TUCI’s capital base by 14%, while capital requirements increased significantly following growth of gross written premiums by approximately 50%. In the first six months of 2014, TUCI’s risk-adjusted capitalisation was placed under further strain following a 4% reduction in capital and surplus, while underwriting risks continued to rise. However, mitigating actions taken by management are expected to improve underwriting performance and curtail growth in the second half of 2014, and risk-adjusted capitalisation may stabilise by year-end 2014.
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.
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