AM Best Withdraws Credit Ratings of Oman Insurance Company P.S.C.

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 Oman Insurance Company P.S.C. (Sukoon) (United Arab Emirates) [UAE]. The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings as the company has requested to no longer participate in AM Best’s interactive rating process.

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

Sukoon’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 Sukoon’s risk-adjusted capitalisation to remain comfortably in excess of the strongest threshold prospectively, as the company executes its strategic plan, supported by continued internal capital generation. The company’s balance sheet strength is supported further by its relatively conservative investment portfolio, excellent liquidity profile and prudent reserving practices. Offsetting factors include Sukoon’s high dependance on reinsurance, although the associated counterparty credit risk is mitigated partially by the use of a panel of financially sound reinsurers.

Sukoon has a track record of strong operating performance, illustrated by a weighted average return-on-equity ratio of 9.9% over the last four years (2019-2022) (2022: 9.5%), following corrective actions implemented in 2018. Despite highly competitive conditions in the UAE insurance market, the company reported an improved profit after tax of AED 223.6 million (USD 60.9 million) in 2022, an increase of 8.5% over 2021. Sukoon’s operating performance continues to be supported by robust non-life underwriting results, with the company achieving a four-year (2019-2022) weighted average combined ratio of 92.5% (2022: 92.1%), as calculated by AM Best, as well as stable investment returns, with a weighted average net investment yield (including gains) of 3.0% over the same period.

Sukoon has a market-leading position in the United Arab Emirates where it ranks as the third-largest listed insurer by gross written premium (GWP). In 2022, Sukoon underwrote AED 4.4 billion (USD 1.2 billion) in GWP, growth of 24.0% over 2021. In recent periods, the company has executed several strategic initiatives to enhance its geographical and product diversifications, notably through the launch of its Lloyd’s syndicate-in-a-box and the acquisition of Assicurazioni Generali S.p.A.’s UAE life insurance portfolio. In May 2023, Sukoon announced the completion of its entry in the UAE takaful insurance market through the acquisition of Arabian Scandinavian Insurance Company P.L.C. - Takaful ASCANA Insurance. Nonetheless, Sukoon’s underwriting portfolio currently remains concentrated in its domestic market where approximately 70.0% of GWP is sourced.

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 Performance Assessments, 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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