AM Best Affirms Credit Ratings of The Bahrain National Insurance Company BSC (c)

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of The Bahrain National Insurance Company BSC (c) (BNI) (Bahrain). The outlook of the Credit Ratings (ratings) is stable.

The ratings reflect BNI’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

BNI’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), robust liquidity and a well-diversified investment portfolio by asset class. Offsetting factors include high reinsurance dependence. Reserve strengthening was required in 2017 and 2018 following an external actuarial review and led to the company adopting more-conservative reserving practices. AM Best expects BNI’s risk-adjusted capitalisation to remain at the strongest level over the medium term, despite the company’s elevated exposure to equities, real estate and other unlisted securities (58% of shareholders’ equity at the end of 2020), which exposes capital adequacy to potential volatility.

BNI’s operating performance in 2020 remained at a strong level, demonstrated by a robust combined ratio of 81.6%, compared with 106.2% in 2017, and a return on equity of 18.4%. AM Best expects the company’s prospective returns to be at a similar level to 2020.

BNI has a well-established franchise as one of the largest non-life insurance companies in Bahrain, where it holds a leading market position in the motor line of business. Although BNI benefits from a strong brand and good reputation locally, the company’s business profile assessment is constrained by its concentration in Bahrain, which has a small insurance market that offers limited profitable growth opportunities.

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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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