LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of National General Insurance Company (P.J.S.C.) (NGI) (United Arab Emirates). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect NGI’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.
NGI’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects prospective risk-adjusted capitalisation to remain at the strongest level, supported by continued internal capital generation. The company’s balance sheet strength is further supported by a strong liquidity profile and low net underwriting leverage, although the latter gives rise to a high dependence on reinsurance. The company has a well-balanced investment portfolio by asset class; however, its concentration in the UAE and moderate exposure to higher-risk assets including equities and real estate are offsetting factors.
NGI has a track record of strong operating performance, illustrated by a weighted average return-on-equity ratio of 8.4% over the last five years (2018-2022). The company’s earnings continue to be supported by robust underwriting results stemming from its non-life portfolio, demonstrated by a five-year (2018-2022) weighted average combined ratio of 90.4%, as calculated by AM Best. Despite highly competitive conditions in NGI’s core lines of business, including medical and motor, the company maintained its strong performance metrics, reporting a combined ratio of 91.5% and net profit of AED 48.5m in 2022.
NGI has a well-established profile in the UAE insurance market as a mid-tier player, where it underwrote AED 650.2 million (USD 177.1 million) of gross written premium in 2022. NGI’s business profile is limited, in part reflective of its concentration in the highly competitive UAE market, and its relative concentration in the medical business that accounts for around 50% of its net written premium. AM Best expects the company to grow modestly over the short-to-medium term, with a focus on achieving bottom line profitability and maintaining a balanced underwriting portfolio.
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