LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of Gulf Insurance Group K.S.C.P. (GIG) and Gulf Insurance and Reinsurance Company K.S.C. (Closed) (GIG-Kuwait) (both domiciled in Kuwait). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect GIG’s consolidated 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.
GIG-Kuwait is a composite insurer with a leading position in Kuwait’s insurance market. The company is strategically important to GIG and highly integrated into its operations.
GIG’s balance sheet is underpinned by consolidated risk-adjusted capitalisation being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and benefits from a comprehensive reinsurance programme and a conservative investment strategy. GIG’s balance sheet is exposed to moderate levels of financial leverage following its acquisition of AXA Insurance (Gulf) B.S.C. (c) and AXA Cooperative Insurance Company (since rebranded as Gulf Insurance Group (Gulf) B.S.C. (c) [GIG Gulf] and Gulf Insurance Group [A Saudi Joint Stock Company]). Borrowings have decreased in 2022 and the group plans to further reduce these over the medium term. AM Best expects that GIG will maintain BCAR scores comfortably above the threshold for the strongest assessment level.
GIG is amongst the largest and most diversified insurance groups in the Middle East and North Africa region. GIG holds leading positions across its core markets, which include Kuwait, Jordan, Bahrain, Saudi Arabia, the United Arab Emirates, Qatar, Oman, Egypt, Turkey and Algeria. In 2022, following the full consolidation of GIG Gulf, the group had reported gross written premium of KWD 0.8 billion (USD 2.7 billion).
The group’s record of strong operating performance has been maintained following the acquisition of GIG Gulf, with positive underwriting performance evident by a five-year (2018-2022) weighted average combined ratio of 95.1% and return-on-equity ratio of 17.4%, as calculated by AM Best, which includes a large one-off accounting gain from the acquisition of GIG Gulf in 2021.
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