LONDON--(BUSINESS WIRE)--A.M. Best has affirmed a Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Qatar General Insurance & Reinsurance Company PJSC (QGIRC) (Qatar). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect QGIRC’s balance sheet strength, which A.M. Best categorises as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
QGIRC’s balance sheet strength is driven by the strongest level of risk-adjusted capitalisation, supported by high levels of liquidity to support its insurance operations, low premium leverage and well-rated reinsurance panel. A.M. Best expects prospective risk-adjusted capitalisation to benefit from good internal capital generation. However, the group’s balance sheet remains heavily concentrated to volatile real estate assets, which accounted for approximately 77% of total investments as at 30 September 2017. Although QGIRC’s investment policy exposes the group’s risk-adjusted capitalisation to significant volatility, its large capital buffers provide some cushion against potential investment losses. To date, QGIRC has demonstrated its ability to prudently manage its investment exposures.
The group’s operating performance, which generated a five-year return on equity of 17.1% (2012-2016), benefits significantly from returns derived from its investment operations, particularly from substantial unrealised gains on its real estate portfolio. The company’s technical performance has improved in recent years following remedial action taken to improve the company’s loss ratio at both QGIRC and General Takaful Company W.L.L. (General Takaful). However, A.M. Best expects a higher than average combined ratio for 2017, stemming from a higher frequency of large losses. Going forward, A.M. Best expects the company to maintain its underwriting discipline and deliver solid combined ratios.
QGIRC writes a diverse book of business across many product lines, providing both conventional (QGIRC) and takaful insurance (General Takaful). On a consolidated basis, QGIRC maintains a good position within Qatar’s insurance market as the second largest insurer by gross written premium, writing QAR 837.6 million (USD 230.2 million) at year-end 2016. The company however, remains highly concentrated geographically with the majority of business written within Qatar.
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