ENP Newswire - 13 June 2014
Release date- 12062014 - A.M. Best has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of 'a-' for Gulf Insurance Group K.S.C.P. (GIG) and its subsidiary Gulf Life Insurance Company K.S.C. (Closed) (GLIC) (both domiciled in Kuwait).
The revised outlook reflects GIG's gradually improving risk-adjusted capitalisation, its strong regional business profile, robust profitability and developing risk management. In 2013, GIG changed its name from Gulf Insurance Company K.S.C. as part of a groupwide rebranding effort.
GLIC writes medical and life business in Kuwait on behalf of GIG. The company is material to GIG's profile domestically and is integrated into its operations. Accordingly, GLIC receives full rating enhancement from its parent company.
GIG is amongst the largest and most diversified insurance groups in the Middle East and North Africa region, with a strong competitive position in Kuwait, Jordan, Bahrain and Egypt. Furthermore, the group has interests in Syria, Iraq, Lebanon, Saudi Arabia and the United Arab Emirates. Over the longer term, GIG has ambitious growth plans and is expected to continue expanding regionally as appropriate opportunities present themselves. In 2013, GIG grew its gross premium written by 8% to KWD 160 million (USD 569 million). Organic growth of a similar magnitude is anticipated during 2014.
GIG's level of risk-adjusted capitalisation has gradually improved in recent years, and was at a good level at year-end 2013. It is expected to remain at this level; however, there are some uncertainties over the trajectory of GIG's prospective risk-adjusted capitalisation as the group looks to expand its franchise through acquisitions. GIG has generated relatively stable earnings in recent years, the retention of which has supported capitalisation as the business has grown.
Continued strengthening of GIG's risk-adjusted capitalisation would be a key factor in any positive rating movement, and a one-notch rating upgrade is possible if the company is able to simultaneously maintain a good level of profitability and its strong regional business profile. There will be negative pressure on GIG's ratings if the group is unable to maintain a good level of risk-adjusted capitalisation.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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This rating announcement has been issued by A.M. Best Europe - Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.
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