LONDON--(BUSINESS_WIRE)-a.m. Best Europe - Rating Services Limited has upgraded the issuer credit rating to "bbb +" from "bbb" and confirmed the rating of the financial strength of B ++ (good) the Arab Orient insurance company (Arab East) (Jordan). The Outlook for both ratings is stable.
"The risk management and insurance companies rating process".
The upgrade reflects the implicit support of the parent company, Gulf insurance company K.S.C (GICs) and importance of the Arab East in the group. In addition, Arab East continues to produce a yield robust operational and maintenance of its very good position in the Jordanian market. A compensation factor is its capital position adjusted risk of decline and marginal, although improving, management of business risks.
Arab East continues to demonstrate a very good review of underwriting profitability, achieve faster than market growth, while maintaining a healthy practice of subscription. Subscription to profitability met JOD 4.6 million (USD 6.5 million) in 2010, JOD 3.7 million (USD 5.2 million) in 2009, with a combined ratio well below 80% (excluding the non-allocated costs). In addition, the performance of the Arab East are supported by a conservative investment strategy achieve modest yields of about 5%.
A.m. Best believes that Arab East has a very good business in Jordan profile, further consolidate its position as leader with a share of 13% of the gross premiums in 2010. Portfolio reflects local characteristics of the market, with 75% of the gross premiums dominated by health care and risk motor.
There are concerns about the level of Arab East of the risk-adjusted capitalization which decreased in recent years, arising from a significant growth of risks, inadequately supported by increases in capital and surplus of subscription. A.m. Best considers the position of capital of the Arab East as adequate for the current rating; However, growth more than projected plans may place capital position of the company under the strain, particularly under stress-based.
In 2010, the Governor in Council has increased its participation in 88.6%, reflecting a restructuring the group providing companies of insurance under the Governor in Council. A.m. Best sees this as a positive development, with the Arab East, benefiting from the expertise and support of the group. This has been demonstrated by the creation of a program of reinsurance group and the continued development of the group enterprise risk management framework.
The main method used in the determination of these ratings is Best Global Life and publishing of non-life insurance, which provides a detailed explanation of the a.m. Best rating process and highlights the employees different marking criteria - credit rating methodology. The used additional key criteria include: "risk management and the Rating process for insurance companies". "Understanding BCAR for Property/Casualty insurers." and "assess country risk". Methodologies are at www.ambest.com/ratings/methodology.
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