AM Best Affirms Credit Ratings of Bahrain Kuwait Insurance Company B.S.C. and Takaful International Company BSC

LONDON, October 06, 2022--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of "a-" (Excellent) of Bahrain Kuwait Insurance Company B.S.C. (GIG BAHRAIN) and its subsidiary, Takaful International Company BSC (GIG BAHRAIN TAKAFUL), both of which are domiciled in Bahrain. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect GIG BAHRAIN’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in lift from GIG BAHRAIN’s parent company, Gulf Insurance Group K.S.C.P., due to the strategic importance of GIG BAHRAIN to the group.

GIG BAHRAIN TAKAFUL’s ratings consider its strategic importance to GIG BAHRAIN. The company provides a platform to underwrite takaful business domestically and increases the overall operation’s market share in Bahrain. Following its acquisition by GIG BAHRAIN, GIG BAHRAIN TAKAFUL has reported improved technical results, with further improvements expected from operational synergies.

GIG BAHRAIN’s balance sheet strength is underpinned by risk-adjusted capitalisation that was at the strongest level at year-end 2021, as measured by Best’s Capital Adequacy Ratio (BCAR). GIG BAHRAIN benefits from a relatively conservative asset allocation and a reinsurance programme placed mostly with reinsurers of good credit quality, which mitigates the elevated credit risk associated with the company’s high cessions on commercial risks. AM Best expects GIG BAHRAIN’s risk-adjusted capitalisation to remain at the strongest level.

GIG BAHRAIN’s underwriting performance has improved following management’s actions in its motor line of business, increased retention of profitable business and further synergies with GIG BAHRAIN TAKAFUL, as evidenced by a 2021 combined ratio of 90.8% against a five-year (2017-2021) weighted average of 93.9%. AM Best expects prospective underwriting performance to remain strong.

GIG BAHRAIN has a leading position in Bahrain’s insurance market and a strong competitive position in Kuwait. The company maintains an excellent domestic franchise, which has been strengthened following its acquisition of GIG BAHRAIN TAKAFUL. The company writes a well-diversified portfolio on a gross premium basis; however, on a net premium basis, its portfolio is concentrated heavily toward motor and medical risks.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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