LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating (ICR) “a-” of International General Insurance Company Limited (IGI) (Bermuda) and International General Insurance Company (UK) Limited (IGIUK) (United Kingdom). A.M. Best also has affirmed the ICR of “bbb-”of International General Insurance Holdings Limited (IGIH) (United Arab Emirates). The outlook for all ratings remains stable.
The ratings of IGI reflect its solid risk-adjusted capitalisation, consistently good technical performance and diversified business profile.
The ratings of IGIUK benefit from rating enhancement from IGI, given its strategic importance to the group. IGIUK is seen as fundamental to IGI’s overall strategy and is integrated into the group through shared management functions and its intragroup reinsurance programme. Additionally, IGIUK’s financial solvency is explicitly guaranteed by IGI. In line with the A.M. Best rating methodology, standard notching is applied to IGIH, the group’s holding company.
IGI’s risk-adjusted capitalisation remains solid and benefits from a conservative investment portfolio and a reinsurance panel of good credit quality. A.M. Best expects IGI’s capital position to be further strengthened by high earnings retention, maintaining a sufficient capital buffer to absorb the company’s strategic initiatives over the next two years.
IGI has demonstrated a track record of good operating performance, evidenced by an improvement in profits in each of the past five years (2010-2014). IGI reported a net profit of USD 35.6 million in 2014, an increase of 5% from 2013, translating into a return on capital and surplus of 13%. IGI’s earnings are driven by strong technical performance with the combined ratio remaining below 87% and stable investment income generated by IGI’s conservative investment strategy. IGI has shown commitment to prudent risk selection with a focus on profitability over top-line growth. Remedial action has been taken on under-performing business segments to ensure future technical performance remains healthy.
IGI continues to diversify its business through the introduction of new products whilst expanding geographically. Although energy accounts for the largest share of premium revenue, property and engineering have been growing in importance. Additionally, IGI operates in a number of platforms worldwide, allowing it access to a broad spread of risks.
Positive rating movement is likely to arise from further growth and diversification of IGI’s business while the company maintains a good level of risk-adjusted capitalisation and demonstrates strong profitability. Negative rating pressure may emerge should the company experience a material reduction in risk-adjusted capitalisation or prolonged deterioration in operating performance.
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