A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of First Insurance Company (FIC) (Jordan). The outlook for both ratings remains stable.
The ratings reflect FIC’s improving business profile, strong risk-adjusted capitalisation and sound financial performance.
FIC has successfully developed a good competitive market position in a short period of time and continues to expand its premium base. The company is a leading takaful operator and is among the top four largest insurers within the Jordanian market. For the first nine months of 2014, FIC reported gross written premiums of JOD 19.4 million, up 7% compared to the same period in 2013.
FIC’s strong risk-adjusted capitalisation is supported by its low underwriting leverage, a reinsurance programme of good credit quality and a conservative investment profile. Risk-adjusted capitalisation has remained resilient, despite strong premium growth in recent years, and is expected to adequately support the company’s business plan over the medium term.
FIC’s overall performance remains sound, although the policyholders’ fund suffered a loss of JOD 0.2 million in 2013, primarily impacted by reserve strengthening. Although the loss-making motor and property business lines continue to negatively affect FIC’s underwriting performance, the combined ratio is expected to remain below 100%. As at 30 September 2014, the company reported a net policyholders’ fund surplus of 0.2 million, whilst the shareholder’s fund recorded a net result of JOD 1.1 million.
Upward rating movement is unlikely over the medium term. Downward rating pressure could arise if there is a substantial deterioration in FIC’s risk-adjusted capitalisation or financial performance.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilised:
- Catastrophe Analysis in A.M. Best Ratings
- Evaluating Country Risk
- Risk Management and the Rating Process for Insurance Companies
- Rating Members of Insurance Groups
- Understanding Universal BCAR
- Takaful (Shari’a Compliant) Insurance Companies
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
