A.M. Best Assigns Credit Ratings to Noor Takaful Family PJSC

LONDON--()--A.M. Best has assigned the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” to Noor Takaful Family PJSC (NTF) (United Arab Emirates). The outlook assigned to these Credit Ratings (ratings) is stable. NTF is a subsidiary of Noor Investments Group L.L.C., a non-operating holding company domiciled in the United Arab Emirates (UAE).

The ratings reflect NTF’s balance sheet strength, which A.M. Best categorises as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management. The ratings also factor in the group’s exposure to the moderate levels of political and financial system risk associated with operating exclusively within the UAE.

NTF’s balance sheet strength assessment has shown a modest improvement during 2017. Following a capital injection of AED 32.5 million in the fourth quarter of 2017, NTF’s risk-adjusted capitalisation, as assessed by Best’s Capital Adequacy Ratio model, has improved marginally. Furthermore, by liquidating unrated sukuks and mutual funds and investing the new capital in cash, the company has reduced investment risk and enhanced its liquidity position. Prospective risk-adjusted capitalisation is likely to be influenced by the growth and performance of the medical portfolio. Offsetting rating factors include the company’s moderate reliance on reinsurance on its health business and a concentrated investment portfolio that is restricted to the UAE. The injection of capital, coupled with the adjustments to the company’s asset profile, has improved NTF’s minimum capital requirement in line with regulatory limits. However, there still remains uncertainty regarding the solvency of the Takaful fund, for which the company is in dialogue with the regulator.

A.M. Best’s adequate assessment of NTF’s operating performance is based on its gradually increasing profits, underpinned by positive underwriting performance on the life insurance portfolio, which is offset partially by losses on the medical insurance business. Investment returns also continue to supplement technical profitability. NTF’s recently appointed management team has taken proactive steps to improve performance, in particular through the introduction of unit-linked individual life insurance policies. The company’s third-quarter results for 2017 indicate operating profits should be achieved at year-end, albeit at a lower level compared to 2016, during which a one-off accounting adjustment for deferred acquisition costs boosted profitability.

NTF operates as a small composite Takaful insurer in the UAE. The company was established in 2008 and has struggled to establish a presence in the highly competitive life and health insurance market. NTF aims to expand its profile through targeting the retail insurance sector via direct sales channels and also via its Dubai Health Authority Participating Insurer licence which was acquired in February 2017.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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Contacts

A.M. Best
Jalpa Thanky, FIA,+44 20 7397 0277
Senior Financial Analyst
jalpa.thanky@ambest.com
or
Mahesh Mistry, +44 20 7397 0285
Senior 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
Director, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Jalpa Thanky, FIA,+44 20 7397 0277
Senior Financial Analyst
jalpa.thanky@ambest.com
or
Mahesh Mistry, +44 20 7397 0285
Senior 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
Director, Public Relations
james.peavy@ambest.com