GIG has strong fi­nan­cial rat­ings for 2017

Kuwait Times - - BUSINESS -

KUWAIT: Gulf In­sur­ance Group (GIG), one of the lead­ing in­sur­ance ser­vice providers in Mid­dle East and North Africa re­gion, an­nounced that Stan­dard and Poor’s rat­ing ser­vices agency up­graded the group’s fi­nan­cial strength rat­ing to “A-” from “BBB+” with sta­ble out­look. In ad­di­tion, A.M. Best rat­ing agency af­firmed the group’s fi­nan­cial strength rat­ing at “A” Ex­cel­lent with sta­ble out­look. The rat­ings of Gulf In­sur­ance Group re­flect its ex­cel­lent re­gional busi­ness pro­file, good riskad­justed cap­i­tal­iza­tion, the con­tin­ued strong prof­itabil­ity and the ca­pa­bil­ity of gen­er­at­ing di­verse in­come streams from its op­er­at­ing sub­sidiaries and associates as well as its own ac­tiv­i­ties to meet its on­go­ing pay­ment obli­ga­tions un­der essen­tially all fore­see­able cir­cum­stances.

An off­set­ting rat­ing fac­tor is the ex­e­cu­tion risk as­so­ci­ated with GIG’s in­or­ganic ex­pan­sion strat­egy. The two agen­cies dis­closed that GIG man­aged to sustain a good risk-ad­justed cap­i­tal­iza­tion de­spite suf­fer­ing for­eign ex­change trans­la­tion losses in Egypt. They also clar­i­fied that GIG has a track record of solid re­sults, un­der­pinned by ro­bust un­der­writ­ing prof­itabil­ity and sta­ble in­vest­ment re­turns. De­spite the el­e­vated lev­els of com­pe­ti­tion in its op­er­at­ing mar­kets, in 2016, GIG grew its gross writ­ten pre­mium by 14 per­cent to KD 217 mil­lion (USD 710 mil­lion), driven by the im­ple­men­ta­tion of med­i­cal in­sur­ance for re­tirees in Kuwait (Afya med­i­cal scheme).

The group’s fi­nan­cial risk pro­file has been as­sessed as up­per ad­e­quate, sus­tained by its strong cap­i­tal and earn­ings and mod­er­ate risk pro­file. The group’s fore­casted cap­i­tal ad­e­quacy is ex­pected to re­main mod­er­ately strong over the out­look pe­riod and it de­pends on suc­cess­ful earn­ings and con­trolled op­er­a­tional growth. Both agen­cies as­sessed the group’s liq­uid­ity as strong. They con­tin­ued to view GIG’s man­age­ment and gov­er­nance as sat­is­fac­tory and fi­nally they as­sessed the group’s en­ter­prise risk man­age­ment (ERM) as ad­e­quate. ERM is as­sum­ing a much stronger role in the group’s di­rec­tion and this partly eases their con­cerns about its re­gional ex­pan­sion pro­gram.

Khalid Al-Hasan, Gulf In­sur­ance Group CEO said, “We are pleased with the out­stand­ing re­sults of the group’s fi­nan­cial strength rat­ings from the in­ter­na­tional rat­ing agen­cies A.M. Best and S&P. GIG’s well estab­lished and com­pre­hen­sive En­ter­prise Risk Man­age­ment frame­work comes with a clear risk-ap­petite state­ment along with ap­pro­pri­ate tools and tech­niques to iden­tify, mea­sure and man­age risks on Group level.”

“We have de­vel­oped our own Group In­ter­nal Cap­i­tal Model in ac­cor­dance with the best prac­tices to iden­tify the key risks and check the op­ti­mum uti­liza­tion of cap­i­tal from an in­ter­na­tional per­spec­tive. De­spite of the ma­jor eco­nomic and po­lit­i­cal chal­lenges in the Arab world, we are also pleased with the Fi­nan­cial Strength Rat­ings of our sub­sidiaries in Kuwait, Egypt, Jor­dan and Bahrain, which have been af­firmed for 2017, in­clud­ing ‘un­der re­view rat­ings’ dur­ing this year,” he added.

Khaled Al-Hasan

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