S&P Assigns Arab Orient ‘A-‘ Rating

Standard & Poor’s Ratings Services has assigned its “A-” long-term counterparty credit and insurer financial strength ratings to Dubai-based Arab Orient Insurance Co. (PSC) (AOIC) with a stable outlook.

“The ratings reflect AOIC’s strong capitalization, very strong earnings, and strong liquidity stated S&P credit analyst Rowena Potter. “These positive factors are partially offset by AOIC’s high utilization of reinsurance and the concentration risk from banking counterparties.”

S&P said the stable outlook reflects its “expectation that AOIC will maintain strong capitalization and very strong earnings, as reflected by the stable outlook. The investment profile will remain highly liquid and focused on bank deposits in securely rated banks. The competitive position will remain at least strong in Dubai, and the franchise will expand into neighboring regions in the medium term.”

“At the current stage, the rating has limited upward momentum,” Potter added, “but a weakening of the rating may occur if the company’s capitalization deteriorates materially, either through its own actions, or through those of the parent Al Futtaim Group (not rated).”