International insurance rating agency A M Best has affirmed the financial strength rating of 'A (Excellent)' and the long-term issuer credit ratings of “a” of Qatar Insurance Company (QIC) and its subsidiary, Qatar Re (Bermuda).
The ratings reflect QIC’s balance sheet strength, which A M Best categorises as “very strong”, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The company’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and benefits from the company’s large capital base of QR7.7bn.
QIC’s excellent financial flexibility has been highlighted by its ability to successfully access capital markets in recent years.
In AM Best’s opinion, these factors, in addition to strong internal capital generation and long-term capital support from shareholders, provide backing for QIC’s strategic initiatives, including those related to inorganic growth.
"The company’s investment risk profile has improved in recent years as a result of higher allocations to cash, deposits and liquid fixed income instruments," Best said.
As at year-end 2018, these assets accounted for 77% of the investment portfolio. During 2018, QIC reported gross written premium (GWP) of QR12.6bn, an increase of 8% on prior year.
Growth was driven primarily by the acquisition of the Markerstudy carriers, which offset material non-renewal of loss making contracts in the group’s reinsurance platform.
More than 75% of GWP is derived from QIC Global, which benefits from a geographically diversified multi-platform approach, including a Lloyd’s platform (Antares), a Bermuda reinsurer (Qatar Re) and carriers for primary insurance in Europe.
In addition, QIC has leading positions in the insurance markets of Qatar and the UAE.
Although QIC’s business mix has been volatile in recent years, reflecting the group’s fluctuating risk and underwriting appetite, it said "going forward, the group plans to focus on low volatility lines, with more than half of GWP emanating from motor insurance in the UK, Continental Europe and the Middle East."
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