AM Best Affirms Credit Ratings of Adamjee Insurance Company Limited

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” (Fair) of Adamjee Insurance Company Limited (Adamjee) (Pakistan). The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect Adamjee’s balance sheet strength, which AM Best assesses as adequate, as well as its strong operating performance, neutral business profile and marginal enterprise risk management (ERM).

The negative outlooks reflect pressure on Adamjee’s non-life underwriting performance, evidenced by a five-year (2021-2025) weighted average combined ratio of 100.3%. Over this period, the company’s profitability has been increasingly reliant on investment returns, and capital generation was not sufficient to sustain growth in the business. While the company’s performance moderately improved in 2026, in part due to management actions and better market conditions in the historically underperforming United Arab Emirates (UAE) motor portfolio, the market remains highly competitive and margins are expected to remain thin.

Adamjee’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). Partially counterbalancing the negative pressure on operating performance is the projected improvement in Adamjee’s balance sheet fundamentals. The company is expected to derisk its investment portfolio materially by year-end 2026. While BCAR is projected to improve meaningfully as consequence, there is significant execution risk. Adamjee’s balance sheet strength benefits from diversification achieved through its holdings of term deposits in the UAE; however, the investment portfolio still remains highly concentrated to equity securities in Pakistan, which exposes the company to potential capital volatility.

Adamjee maintains one of the leading positions in its domestic market, writing a diversified portfolio of life and non-life business, as well as conventional and takaful products. In addition, the company generated close to 55% of its non-life premium income through branch operations in the UAE in 2025, which provides the company with geographical diversification.

AM Best assesses Adamjee’s ERM as marginal given the size and complexity of the company’s operations. Adamjee’s operations in Pakistan present exposure to very high levels of economic, political and financial system risks, some of which are beyond the company’s control.

The rating affirmations follow an accepted appeal from Adamjee in which material new information was provided.

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