AM Best Affirms Credit Ratings of Al-Sagr National Insurance Company P.S.C.

BY Business Wire | CORPORATE | 12/23/21 01:25 PM EST

LONDON--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of ?bb? (Fair) of Al-Sagr National Insurance Company P.S.C. (ASNIC) (United Arab Emirates). The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect ASNIC?s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.

The balance sheet strength assessment reflects ongoing erosion of ASNIC?s capital base following an AED 39.2 million net loss for the nine-month period ended 30 September 2021. This follows declines in the company?s capital position in 2019 and 2020. Despite the surplus deterioration, ASNIC continues to narrowly maintain risk-adjusted capitalization at the very strong level, as measured by Best Capital Adequacy Ratio (BCAR). The adequate balance sheet strength assessment also considers ASNIC?s increased financial leverage as a result of its overdraft increasing by AED 90.8 million to reach AED 138.2 million at the end of third-quarter 2021. The company?s investment portfolio has a high concentration of volatile domestic real estate and equity assets. The negative outlooks reflect the potential for further weakening in balance sheet strength metrics, due to the potential for further operating and/or investment losses. Operating performance has experienced a significant downward trend in 2021, driven by underwriting losses on motor business and a share in net losses of an associate. The limited business profile assessment reflects product and geographic concentration in its local market. AM Best views ERM as marginal for the company?s size and scope of operations.

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 media use of Best?s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best?s Credit Ratings and AM Best Rating Action Press Releases.

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 ? 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

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