A.M. Best Assigns Credit Ratings to Al Ahleia Insurance Company


20/04/2017 09:36 AST

A.M. Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to Al Ahleia Insurance Company S.A.K.P. (AAIC) (Kuwait).

The outlook assigned to these Credit Ratings (ratings) is stable. The ratings assigned to AAIC reflect the company’s good business profile, track record of excellent underwriting performance and solid risk-adjusted capitalisation.

AAIC’s good business profile on the direct market in Kuwait was enhanced and diversified following the acquisition of Kuwait Reinsurance Company K.S.C.P. (Kuwait Re) in the second half of 2015. This acquisition has served to significantly increase and diversify geographically AAIC’s premium base, with consolidated gross written premium (GWP) having nearly doubled to KWD 61.8 million in 2016 compared with KWD 32.1 million, pre-acquisition in 2014. Kuwait Re has reinsurance operations spanning the Middle East and North Africa, Asia-Pacific and Central and Eastern Europe, providing proportional, non-proportional and facultative solutions to its cedants, and wrote GWP of KWD 29.4 million in 2016. In Kuwait, AAIC is a leading direct insurer and an established top four player in the market, writing a portfolio of commercial and personal risks, including motor, medical and life business. AAIC’s market position in Kuwait is supported by its focus on commercial segments, in which it maintains robust market shares, as opposed to the highly competitive motor and medical classes. For 2016, AAIC’s direct GWP arising from Kuwait reached KWD 32.3 million.

AAIC has a track record of excellent technical performance on its direct insurance operations in Kuwait. The company realised a pre-acquisition five-year average (2010-2014) non-life combined ratio of 52 per cent for these operations, and has maintained a similar level of strong technical performance post-acquisition. This is viewed as a significant element underpinning the ratings. AAIC’s technical performance in Kuwait has been driven by solid technical control of its direct operations, whilst benefiting from favourable inward reinsurance commissions that serve to offset its expense base. Following the acquisition of Kuwait Re, AAIC’s consolidated technical margin has reduced, with the company reporting a consolidated non-life combined ratio of 90 per cent for 2016 (first full year of consolidation), reflective of a less favourable loss experience and increased acquisition costs at Kuwait Re’s level. Whilst the acquisition of Kuwait Re is anticipated to generate some volatility in AAIC’s consolidated technical performance, A.M. Best expects actions taken by the group to translate into improved consolidated technical performance over the coming years.

AAIC’s risk-adjusted capitalisation is considered as solid. Consolidated capital consumption continues to be driven by investment risks, as a result of significant exposures to equities and unquoted funds, although increased premium retention arising from Kuwait Re’s substantially retained reinsurance portfolio has increased the underwriting risk for the group. Whilst the acquisition of Kuwait Re has served to introduce some strain on AAIC’s balance sheet strength, consolidated risk-adjusted capitalisation remains at a solid level. A.M. Best notes the actions the group is taking to de-risk the balance sheet, and expects these to translate into an improved risk-adjusted capitalisation in the medium term.

Partially offsetting AAIC’s ratings is the limited nature of the group’s enterprise risk management (ERM) framework. Whilst AAIC and Kuwait Re have in place risk management frameworks and capabilities considered adequate for their specific risk profiles, a comprehensive group-wide ERM framework is not yet established, which drives A.M. Best’s limited assessment of the group’s ERM framework.

CPI Financial
Al Ahleia Insurance Co. - AINS
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | News Archive
Most Viewed Companies
Ticker Price Volume
QNBK 142.5 107,519
DAMAC 2.9 10,745,709
WAHA 1.75 159,227
BKIZ 0.08 603,308
EEC 20.95 333,420
SABIC 98.4 2,362,937
BKNZ 0.09 1,072,179
Recent News

Honeywell, Aramco sign agreement for advanced digitisation in Oil&Gas
Honeywell and Saudi Aramco have signed a memorandum of understanding (MoU) for implementing the Industrial Internet of Things (IIoT) and advanced digitisation within Saudi Aramco’s operations.
<

Saudi Arabia Signs $50 Billion Worth Of Oil Deals With The U.S.
U.S. companies signed billions of dollars worth of deals with Saudi Arabia’s oil and gas industry during President Donald Trump’s visit to the Kingdom over the weekend, boosting bilateral business ti

Oil prices rise as market expects extended production cut
Oil prices rose on Wednesday, supported by confidence that an OPEC-led output cut aimed at tightening supply would be extended to all of 2017 and the first quarter of next year.

Brent futu

Leading security firm plans Oman operations
Le Beck, which has a presence in some of the Gulf Cooperation Council (GCC) countries, is planning to begin operation in the Sultanate in coming months, a top-level official said.

In an in

National Finance to raise OMR46m to fund ‘cash buyout’ of Oman Orix
National Finance Company plans to raise OMR45.8 million by way of a rights issue and a perpetual bond issue to raise fund for its ‘cash buyout’ of the Oman Orix Leasing Company.

The Board

GulfBase GCC Index
Search By
  • Company Symbol
  • Company Name
  • Mutual Fund Name
  • News Content
Send this page to a friend

Poll

Looking ahead, what change you are more likely to make in investing in your domestic stock market?