A.M. Best Affirms Ratings of The Bahrain National Insurance Company BSC (c)

LONDON--()--A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of The Bahrain National Insurance Company BSC (c) (BNI) (Bahrain). The outlook for both ratings is stable.

The ratings reflect BNI’s overall robust operating performance, strong level of risk-adjusted capitalisation and leading domestic franchise.

BNI has maintained strong operating results producing earnings of BHD 3 million (USD 9 million) in 2013, driven by improved technical profitability with a reported loss ratio of 58.4% (2012: 60.0%). Based on interim results, the company is likely to maintain strong underwriting profitability in 2014, driven by its ability to preserve profitable rates on its motor portfolio while increasing the proportion of commercial risks underwritten in the domestic market, which benefit from high inward reinsurance commission. This strategic decision to refocus on the domestic market reflects BNI’s desire to grow its profile and scale in areas where it has solid expertise and a view to take advantage of the expected increase in government-initiated infrastructure projects.

Despite the company’s high dividend pay-out ratio, risk-adjusted capitalisation is expected to remain strong, benefiting from low underwriting leverage and a well- rated panel of reinsurers.

Positive rating movement is likely to arise from further growth and diversification of BNI’s business profile, coupled with maintaining good risk-adjusted capitalisation and operating performance. Negative rating action could result from a notable and continuous deterioration in the underwriting performance or a material fall in BNI’s 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.

Key insurance criteria reports utilised:

  • Understanding Universal BCAR
  • Evaluating Country Risk
  • Risk Management and the Rating Process for Insurance Companies
  • Catastrophe Analysis in A.M. Best Ratings
  • Rating Members of Insurance Groups

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 press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

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
Salman Siddiqui, ACA, +(44) 20 7397 0311
Financial Analyst
salman.siddiqui@ambest.com
or
Mahesh Mistry, +(44) 20 7397 0325
Director, Analytics
mahesh.mistry@ambest.com
or
Christopher 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

Contacts

A.M. Best
Salman Siddiqui, ACA, +(44) 20 7397 0311
Financial Analyst
salman.siddiqui@ambest.com
or
Mahesh Mistry, +(44) 20 7397 0325
Director, Analytics
mahesh.mistry@ambest.com
or
Christopher 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