Global credit rating agency AM Best has affirmed the financial strength rating of ‘B++’ (Good) and the long-term issuer credit rating of ‘bbb’ (Good) of Qatar General Insurance and Reinsurance Company (QGIRC).
The ratings reflect QGIRC’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The rating agency notes that QGIRC has taken remedial actions to strengthen the internal controls, processes and governance; however, these are currently untested.
QGIRC’s balance sheet strength assessment is underpinned by risk-adjusted capitalisation at the “very strong” level, as measured by Best’s Capital Adequacy Ratio (BCAR).
The rating agency projects the company’s prospective risk-adjusted capitalisation to remain at least at the very strong level, supported by internal capital generation. The balance sheet strength assessment benefits from QGIRC's history of favourable reserve development and adequate liquidity to cover its net insurance liabilities.
However, QGIRC has a highly concentrated investment portfolio, with just three real estate holdings accounting for over half of the company’s total investments, exposing the balance sheet to significant potential capital volatility, Best said.
Further offsetting balance sheet strength factors include the company’s high reinsurance dependence and borrowings of a generally short duration, which expose the company to refinancing risk.
QGIRC has a track record of adequate underwriting profitability, demonstrated by a five-year (2017-21) weighted average combined ratio of 99%.
However, throughout the past five years, QGIRC has reported unrealised investment losses totalling QR1.7bn, which more than offset underwriting profits over this period. These fair value losses primarily emanated from three real estate investments, the report said.
The rating agency expects prospective operating results to be supported by the company’s increased focus on selective underwriting, along with steady commission income.
QGIRC has a leading market position in Qatar, where it ranks among the three largest listed insurance companies by gross written premium.
While QGIRC’s book of business is moderately diversified by line of business on a gross basis, this is partially offset by a concentration in motor on a net basis and its geographic concentration in Qatar’s market.
QGIRC reported a 14.91% year-on-year increase in net profit to QR56.77mn in the first three months of this year.
The ratings reflect QGIRC’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The rating agency notes that QGIRC has taken remedial actions to strengthen the internal controls, processes and governance; however, these are currently untested.
QGIRC’s balance sheet strength assessment is underpinned by risk-adjusted capitalisation at the “very strong” level, as measured by Best’s Capital Adequacy Ratio (BCAR).
The rating agency projects the company’s prospective risk-adjusted capitalisation to remain at least at the very strong level, supported by internal capital generation. The balance sheet strength assessment benefits from QGIRC's history of favourable reserve development and adequate liquidity to cover its net insurance liabilities.
However, QGIRC has a highly concentrated investment portfolio, with just three real estate holdings accounting for over half of the company’s total investments, exposing the balance sheet to significant potential capital volatility, Best said.
Further offsetting balance sheet strength factors include the company’s high reinsurance dependence and borrowings of a generally short duration, which expose the company to refinancing risk.
QGIRC has a track record of adequate underwriting profitability, demonstrated by a five-year (2017-21) weighted average combined ratio of 99%.
However, throughout the past five years, QGIRC has reported unrealised investment losses totalling QR1.7bn, which more than offset underwriting profits over this period. These fair value losses primarily emanated from three real estate investments, the report said.
The rating agency expects prospective operating results to be supported by the company’s increased focus on selective underwriting, along with steady commission income.
QGIRC has a leading market position in Qatar, where it ranks among the three largest listed insurance companies by gross written premium.
While QGIRC’s book of business is moderately diversified by line of business on a gross basis, this is partially offset by a concentration in motor on a net basis and its geographic concentration in Qatar’s market.
QGIRC reported a 14.91% year-on-year increase in net profit to QR56.77mn in the first three months of this year.