Moody's rates Qatar Is­lamic In­surance Com­pany

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LON­DON

Global rat­ing agency Moody's an­nounced to­day that it had as­signed a Baa2 in­surance fi­nan­cial strength rat­ing (IFSR) to the Qatar Is­lamic In­surance Com­pany. The rat­ing out­look is sta­ble.

Qatar Is­lamic In­surance Com­pany (QIIC) was cre­ated in 1995 and was one of the first Is­lamic in­surance com­pa­nies in the world.

Op­er­at­ing ex­clu­sively in the State of Qatar, QIIC pro­vides both life and non-life in­surance to in­di­vid­u­als and busi­nesses in Qatar with gross con­tri­bu­tions of QR 210 MM in 2011 (USD 57.0 MM) and to­tal as­sets of QR 579 MM (US$ 173 MM).

Although pri­vately owned, QIIC is an im­por­tant in­surer in Qatar, with the prin­ci­pal owner and Chair­man of the Board be­ing Sheikh Thani Bin Ab­dul­lah Al-Thani, a mem­ber of the rul­ing fam­ily and one of the wealth­i­est busi­ness­men in the world. QIIC is run on the al-Wakala Is­lamic in­surance model, which main­tains sepa- rate funds for pol­i­cy­hold­ers and share­hold­ers. Moody's notes that QIIC's rat­ing re­flects both the stand-alone fun­da­men­tals as well as in­cor­po­rat­ing the ben­e­fits the com­pany de­rives from its share­hold­ers.

Global rat­ing agency Moody's notes the main stan­dalone strengths of QIIC are its ex­tremely strong cap­i­tal­iza­tion in re­la­tion to in­surance risk, and the strong prof­itabil­ity at both the un­der­writ­ing level (rel­a­tive to peers in the Mid­dle East) and the bot­tom line.

Moody's notes the main chal­lenges are i) to man­age the sig­nif­i­cant in­vest­ment risk, as QIIC in­vests pre­dom­i­nantly in Qatari eq­uity and prop­erty mar­kets, with QIIC in­vest­ing a fur­ther QR80.6m in real es­tate in H1 2012, ii) the over­all level of ex­po­sure to Qatar both through in­surance and in­vest­ment risk, and iii) to di­ver­sify the port­fo­lio away from its cur­rent fo­cus on mo­tor (which as at YE 2011 ac­counted for al­most 60% of con­tri­bu­tions (47% as at H1 2012), with­out sac­ri­fic­ing prof­itabil­ity).

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