A.M. Best has affirmed the financial strength rating of “B++ (Good)” and the issuer credit rating of “bbb” of Bankers Assurance, of Lebanon. The outlook for both ratings remains stable.
According to the agency, the ratings reflect Bankers Assurance’s strong risk-adjusted capitalisation, solid technical performance and established market franchise in Lebanon. Offsetting rating factors are the economic and political risks associated with operating in Lebanon.
Bankers Assurance’s risk-adjusted capitalisation remained strong in 2014, despite an increase in net underwriting risks stemming from high growth in the company’s life, medical and motor lines of business.
The company’s capital position is likely to strengthen in 2015, as A.M. Best has stated that it expects robust internal capital generation to support prospective growth.
The company expects to report a net result of approximately $7.4 million for 2014, driven by its underwriting performance, with the combined ratio expected to remain in line with the five-year average of around 90 percent, and a stable investment return of approximately 2 percent.
Bankers Assurance has a diversified portfolio covering life and non-life business segments, and is the main insurance arm of Nasco Insurance Group, a large insurance and reinsurance group with operations across Europe and the Middle East.
Regional political instability and social unrest have the potential to seriously disrupt economic conditions in Lebanon.
Despite Bankers Assurance’s solid operating performance, the potential for business disturbance remains heightened. A.M. Best has said it will continue to monitor developments in Lebanon and assess any impact on the company.
A.M Best commented: “Upward rating movement for [Bankers Assurance] is unlikely in the near term.”
“Downward rating pressure could occur if [its] risk-adjusted capitalisation were to decrease to a level not supportive of the current ratings, from a prolonged deterioration in operating performance, or due to an increase in the level of political and economic risks in Lebanon.”
