International credit rating agency AM Best has affirmed the financial strength ratings of 'A (Excellent)' and the long-term issuer credit ratings of “a” of Qatar Insurance Company and its Bermuda-based subsidiary, Qatar Reinsurance (Qatar Re).
The ratings reflect QIC’s balance sheet strength, which the agency categorises as “very strong”, as well as its robust operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Although QIC’s ERM framework has improved in recent years, it believes there is further development required in order for QIC to manage risk holistically at group level, rather than relying on the risk management teams of subsidiaries.
The group’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 financial flexibility has been highlighted by its ability to access capital and debt markets, most recently through the issue of $300mn of subordinated notes in 2020.
Higher allocations to cash, deposits and fixed income in the group’s investment portfolio in recent years have improved its investment risk profile. At end-2019, these assets accounted for 83% of QIC’s investment portfolio, according to AM Best.
During 2019, QIC reported gross written premium (GWP) of QR12.8bn, an increase of 2% on previous year. More than 75% of GWP is derived from the 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.
Since 2017, QIC Global’s results have been "adversely" impacted by catastrophe losses, changes to the UK’s Ogden discount rate and Covid-19 related losses in 2020, it said, highlighting that as a consequence, the group has produced a five-year (2015-2019) average combined ratio of 102%.
The rating agency expects the group to report a combined ratio in the range of 105% to 110% this year, driven by Covid-19 losses.
QIC has a leading position in Qatar and a strong competitive position in a neighbouring country.
"While QIC’s business mix has been volatile in recent years, the group plans to focus on low volatility lines, with almost half of GWP emanating from motor insurance in the UK, continental Europe and the Middle East," the rating agency said.
QIC has seen its GWP grow by 4% to QR10.2bn in the first nine months of 2020, primarily driven by hardening of rates in commercial insurance and reinsurance.
As per the financial statement for the nine-month this year, QIC’s international business accounts for approximately 75% of the group’s well diversified domestic and international book of business.
Recently, QIC subsidiary QLM Medical and Life Insurance Company announced its initial public offering (IPO) through which it sought to sell 60% stake to the public. After the maiden offer, Qatar Insurance Group will retain 25% stake and the other 15% will be retained by other pre-IPO investors or founders.
Although QIC’s ERM framework has improved in recent years, it believes there is further development required in order for QIC to manage risk holistically at group level, rather than relying on the risk management teams of subsidiaries.
The group’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 financial flexibility has been highlighted by its ability to access capital and debt markets, most recently through the issue of $300mn of subordinated notes in 2020.
Higher allocations to cash, deposits and fixed income in the group’s investment portfolio in recent years have improved its investment risk profile. At end-2019, these assets accounted for 83% of QIC’s investment portfolio, according to AM Best.
During 2019, QIC reported gross written premium (GWP) of QR12.8bn, an increase of 2% on previous year. More than 75% of GWP is derived from the 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.
Since 2017, QIC Global’s results have been "adversely" impacted by catastrophe losses, changes to the UK’s Ogden discount rate and Covid-19 related losses in 2020, it said, highlighting that as a consequence, the group has produced a five-year (2015-2019) average combined ratio of 102%.
The rating agency expects the group to report a combined ratio in the range of 105% to 110% this year, driven by Covid-19 losses.
QIC has a leading position in Qatar and a strong competitive position in a neighbouring country.
"While QIC’s business mix has been volatile in recent years, the group plans to focus on low volatility lines, with almost half of GWP emanating from motor insurance in the UK, continental Europe and the Middle East," the rating agency said.
QIC has seen its GWP grow by 4% to QR10.2bn in the first nine months of 2020, primarily driven by hardening of rates in commercial insurance and reinsurance.
As per the financial statement for the nine-month this year, QIC’s international business accounts for approximately 75% of the group’s well diversified domestic and international book of business.
Recently, QIC subsidiary QLM Medical and Life Insurance Company announced its initial public offering (IPO) through which it sought to sell 60% stake to the public. After the maiden offer, Qatar Insurance Group will retain 25% stake and the other 15% will be retained by other pre-IPO investors or founders.