Sunday 23, September 2018 by Kudakwashe

AM Best downgrades Saudi Arabian Insurance Company

 

The ratings were placed under review with negative implications in April 2017, following the discontinuation of the firm’s strategic business relationship with its international partner.

AM Best has downgraded the financial strength rating of Saudi Arabian Insurance Company to B++ from A- with a negative outlook.

In a statement, the rating agency stated that the rating downgrades and negative outlook reflect the company’s inability to substitute business lost following the termination of this relationship.

The termination of the relationship has had a negative impact on the insurance firm’s business profile and prospective operating performance.

Saudi Arabian Insurance Company’s premium volumes have decreased materially during the first half of 2018, posting gross written premiums of $37 million, a 76 per cent decline compared with the same period last year.

The company’s underwriting leverage is considered to be very low and capital requirements are driven largely by asset risk arising from the company’s concentrated investment portfolio that is weighted toward affiliated investments and a group treasury account, added AM Best.

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