AM Best Affirms Credit Ratings of National Insurance Company

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” (Fair) of National Insurance Company (NIC) (Jordan). The outlook of these Credit Ratings (ratings) is stable.

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

NIC’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by good internal capital generation and moderate underwriting leverage. The balance sheet strength assessment factors in the company’s good level of liquidity, with bank deposits and fixed-income securities covering net technical provisions by 108% at year-end 2021. Partially offsetting rating factors include NIC’s exposure to the high financial system risk associated with Jordan, where NIC’s investments are held, the company’s small capital base, which exposes its risk-adjusted capitalisation to potential volatility, and its moderate dependence on reinsurance for writing large limit risks.

NIC has a track record of adequate operating performance with a five-year (2017-2021) weighted average return-on-equity ratio of 5.3%. Technical results have been improving in recent years, following remedial actions taken by management in response to weak technical performance in 2018 on the medical and motor lines of business. Operating earnings have been supplemented historically by generally modest investment income, reflecting the company’s relatively conservative investment portfolio. AM Best expects NIC’s technical profitability to support adequate operating results prospectively.

NIC’s limited business profile assessment reflects the company’s relatively small size and concentration to Jordan’s intensely competitive medical and motor insurance markets. NIC is a midtier player in Jordan, where it maintains a market share of approximately 3% (based on total market premium in 2021).

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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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