GIG has strong financial ratings for 2017
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.