A.M. Best Europe – Rating Services Limited has assigned the financial strength rating (FSR) of A (Excellent) and an issuer credit rating (ICR) of "a" to The Mediterranean & Gulf Insurance & Reinsurance Company B.S.C. (c) (Bahrain) (Medgulf Bahrain) and to The Mediterranean & Gulf Cooperative Insurance & Reinsurance Company (S.J.S.C.) (Kingdom of Saudi Arabia) (Medgulf KSA). Concurrently, an FSR of B++ (Good) and an ICR of "bbb+" have been assigned to The Mediterranean & Gulf Insurance & Reinsurance Company S.A.L. ( Lebanon ) (Medgulf Lebanon). The outlook assigned to all ratings is stable. The ratings reflect the group's strong overall business profile, solid risk-adjusted capitalisation and robust operating performance. Medgulf Bahrain has a strong regional franchise within the Middle East , with leading market positions in Saudi Arabia and Lebanon . In 2012, gross written premiums (GWP) reached SAR 4.1 billion ( $1.1 billion ), mainly driven by medical and motor business lines which accounted for 80 per cent and 10 per cent of GWP respectively. Medgulf Bahrain's main market is Saudi Arabia, which generated approximately 80 per cent of the group's premium revenue, with a further 10 per cent from Lebanon . The company also operates in Bahrain , Jordan and the United Kingdom ( UK ). Medgulf Bahrain's risk-adjusted capitalisation improved in 2012, benefiting from a capital injection of SAR 460.6 million ( $124 million ) by the International Finance Corporation (a member of the Word Bank Group ), which acquired 14 per cent of the group's equity. The group's prospective capital position is expected to remain supportive of the rating level, with good earnings retention expected to absorb projected growth over the next two years. Medgulf Bahrain exhibits robust operating profitability with a five year average combined ratio below 90 per cent. The company recorded a technical profit of SAR 116.5 million ( $31.1 million ) in 2012, while investment income remained modest at SAR 31.9 million ( $8.5 million ). The group's earnings are expected to remain resilient in the next few years, mainly driven by underwriting performance. Upward rating movement for Medgulf Bahrain is unlikely in the near term. Downward rating pressure could occur if there were a prolonged deterioration in Medgulf Bahrain's operating performance and /or its risk-adjusted capitalisation were to decrease to a level not supportive of the current ratings. The ratings of Medgulf KSA and Medgulf Lebanon receive rating enhancement from Medgulf Bahrain, given their strategic importance to the group. Upwards and downwards rating movement of Medgulf Bahrain's key subsidiaries would result from a change in the stand-alone assessment, or a revision of the rating enhancement of the respective subsidiary.
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