A.M. Best has downgraded the financial strength rating (FSR) of The Mediterranean and Gulf Cooperative Insurance and Reinsurance Company and its main subsidiary from “A- (Excellent)” to “B++ (Good)” and the issuer credit rating (ICR) to “bbb+” from “a-“.
The outlook on the FSRs and ICRs for Medgulf Bahrain and Medgulf Lebanon all remain stable. The outlook for the ICR for Medgulf KSA has been revised to negative from stable, while the outlook for the FSR remains stable.
The rating downgrades of Medgulf Bahrain and Medgulf KSA reflect deterioration in the capital position at both these entities.
This follows reserve strengthening at Medgulf KSA, which has led to a material underwriting loss recorded in H1 2015.
In addition, risk-adjusted capitalisation at both of these entities has decreased over the past two years due to adverse reserve development booked in 2013, following a regulatory shift in reserving practice, coupled with elevated levels of understanding growth.
The rating affirmations on Medgulf Lebanon reflect the company’s market leading position in Lebanon, its solid level of risk-adjusted capitalisation and its improving technical performance.
The company has reported better than budgeted half-year 2015 results.
