AM Best Revises Outlooks to Negative for SNIC Insurance B.S.C. (c)

LONDON--(BUSINESS WIRE)--AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and Long-Term Issuer Credit Rating of “bbb-” (Good) of SNIC Insurance B.S.C. (c) (SNIC) (Bahrain).

These Credit Ratings (ratings) reflect SNIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management. The revision of the outlooks to negative reflects SNIC’s weakened overall earnings with operating losses reported in 2021 and 2022, stemming from both underwriting and investment losses.

SNIC’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level at year-end 2022, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects SNIC’s BCAR to remain at the strongest level, supported by reduced volatility, after scaling down SNIC’s holding in Wataniya Insurance Company (Wataniya), an affiliated publicly listed company in 2023.

SNIC’s operating performance has weakened, with a five-year (2018-2022) weighted average return-on-equity ratio of -0.3%. In 2022, SNIC showed an underwriting loss, which translated into a combined ratio of 107.7% (as calculated by AM Best), a decline compared with 99.3% in 2021. AM Best notes that tough market conditions and execution risk remain a challenge to SNIC in achieving consistent underwriting profitability. SNIC has launched performance remediation actions and is expecting to show breakeven results in 2024.

SNIC reported gross written premium of BHD 14.3 million (USD 38.2 million) in 2022, demonstrating approximately 12% growth compared with the previous year. The limited business profile assessment reflects SNIC’s concentration by geography and product, as the company solely operates in the highly competitive and relatively small Bahrain market, where it focuses on motor and medical insurance.

SNIC is an insurance subsidiary of E.A. Juffali & Brothers, a family-owned conglomerate operating in Saudi Arabia. SNIC receives no rating enhancement or drag from this affiliation.

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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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