Best Affirms Qatar General Ratings

October 20, 2006

A.M. Best Co. has affirmed the financial strength rating of “B++” (Very Good) and the issuer credit rating (ICR) of “bbb” of Qatar General Insurance and Reinsurance Company (S.A.Q.) (QGIR) (Qatar), both with a stable outlook.

“The ratings reflect QGIR’s maintenance of strong risk-adjusted capitalization in 2006 and 2007 supported by solid retained earnings,” said Best. It also noted that it ” believes that the absolute level of capital and surplus will be sufficient to absorb the significant forecasted growth in net premiums written of approximately 45 percent at year-end 2006, largely due to QGIR’s new business, particularly in respect to energy and motor portfolios. The company’s main accounts are energy, motor and engineering business, with approximately 95 percent of business emanating from Qatar and the balance from Dubai.”

In Best’s opinion, “QGIR is well positioned to take advantage of the new business available as a result of strong economic growth in Qatar, where it has approximately 30 percent of the market share.” However, Best also said it “will closely monitor the company’s business position following the opening up of the local market to broker and foreign insurance companies, although this is unlikely to impact QGIR’s business position during the next two years.”

Best also said it believes the “company’s combined ratio during the next two years is likely to remain in line with the 2005 level of 80.4 percent, as the motor business will continue to impact the overall technical performance. Despite the significant fall in the Doha Securities Market (local equity market), A.M. Best expects QGIR’s investment returns to remain very good and increase to approximately 15 percent at year-end 2006 (compared to 10.5 percent in 2005) due to significant gains on the sale of the company’s real estate portfolio.”

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