LONDON--(BUSINESS WIRE)--AM Best has placed under review with negative implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Al Ittihad Al Watani (L’Union Nationale) Société Générale D’Assurances du Proche Orient, sal (Al Ittihad) (Lebanon).
These Credit Rating (rating) actions reflect the increased social, political and economic instability in Lebanon. In October 2019, demonstrations spread across the country, rapidly leading to the resignation of the government. Since then, political and economic uncertainty has increased significantly, with a slowdown in capital inflows causing, in some instances, cash flow constraints to the economy.
Al Ittihad originates all of its business and holds most of its investments in the United Arab Emirates. However, it has some exposure to the heightened risk in Lebanon as it is its country of domicile. Furthermore, Al Ittihad’s ratings factor in some rating enhancement from its sister company, Bankers Assurance S.A.L. (Bankers). The ratings of Bankers were downgraded and placed under review with negative implications on 9 December 2019 as a result of the structural market issues stemming from the increased social, political and economic instability in Lebanon, which weaken its balance sheet strength.
AM Best will monitor how events unfold in Lebanon and aim to resolve the under review status once there is more clarity as to the impact of these events on the credit profile of Al Ittihad and its sister company, Bankers.
This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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