AM Best Affirms Credit Ratings of Liva Group SAOG

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 Liva Group SAOG (Liva Group) (Oman). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Liva Group’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. In addition, the ratings factor in a neutral impact from the group’s majority ownership by Oman International Development and Investment Company SAOG.

In 2023, National Life and General Insurance Company SAOG (NLGIC) was renamed Liva Group SAOG after having adopted the brand name of ‘Liva’. The rebrand follows the completion of the acquisition and integration of Liva Insurance B.S.C. (c) [formerly known as Royal & Sun Alliance Insurance (Middle East) Limited B.S.C. (c)] in 2022.

Liva Group’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by a track record of good internal capital generation. The balance sheet strength assessment also factors in the group’s conservative investment allocation by asset class and a well-diversified reinsurance panel of sound financial strength. A partially offsetting rating factor is a rise in the group’s financial leverage levels in recent periods driven by borrowings to fund the aforementioned acquisition, although this is expected to reduce prospectively with ongoing repayments. The group’s balance sheet strength assessment also considers the economic, political and financial system risks associated with Oman and the United Arab Emirates (UAE), which are Liva Group’s key operating markets.

Liva Group has a track record of strong operating performance, as evidenced by a five-year (2018-2022) weighted average return-on-equity ratio of 14%. Historical operating profitability has been driven by strong underwriting returns from its non-life portfolio, evidenced by a five-year weighted average combined ratio of 95%. However, operating performance deteriorated in 2022 and 2023, driven by lower technical profitability of the motor book of business, as well as expenses incurred for integration and rebranding. Prospectively, AM Best expects operating performance to improve over the medium term supported by underwriting discipline and expense control measures.

Liva Group is deemed to have a well-diversified profile by product and geography. The business profile assessment factors in the group’s leading market position in Oman, its presence in the UAE, Saudi Arabia, Bahrain and Kuwait, as well as its planned expansion into Qatar.

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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