A.M. Best Affirms Credit Ratings of Gulf Insurance Group K.S.C.P. and Gulf Insurance and Reinsurance Company K.S.C. (Closed), June 15, 2017

A.M. Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of Gulf Insurance Group K.S.C.P. (GIG) and its subsidiary, Gulf Insurance and Reinsurance Company K.S.C. (Closed) (GIRI) (both domiciled in Kuwait). The outlook of these Credit Ratings (ratings) remains stable.

The ratings of GIG reflect its excellent regional business profile, good risk-adjusted capitalisation, and track record of robust underwriting profitability. An offsetting rating factor is the execution risk associated with GIG’s inorganic expansion strategy.

GIG is amongst the largest and most diversified insurance operators in the Middle East and North Africa region, with strong market positions in Kuwait, Jordan, Bahrain and Egypt. The group also has interests in Syria, Iraq, Saudi Arabia, Algeria, Turkey and the United Arab Emirates. In 2016, GIG grew its gross written premium by 14% to KWD 217 million (USD 710 million), driven by the implementation of medical insurance for retirees in Kuwait (the Afya medical scheme).

GIG’s risk-adjusted capitalisation remains good, despite the company suffering foreign exchange translation losses in Egypt. GIG has a track record of solid results, underpinned by robust underwriting profitability and stable investment returns. Despite elevated levels of competition in its operating markets, GIG has delivered an excellent five-year (2012-2016) average combined ratio of 87%, which was complemented by an average investment return of 4% over the same period. As a result, GIG has produced a strong average return on equity of 17% over the past five years.