Moody's rates Qatar Islamic Insurance Company

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).