A.M Best has affirmed the financial strength rating (FSR) of “A- (excellent)” and issuer credit rating of “a-“ of Islamic Arab Insurance (Salama). The outlook for both ratings remains stable.
The ratings reflect Salama’s good business profile and strong risk-adjusted capitalisation.
Offsetting factors include the effect of the Thai flood losses on Salama’s otherwise consistent underwriting profitability and its fast growth written premiums in 2011.
“Salama’s level of risk-adjusted capitalisation is likely to remain at a strong level over the medium term. Salama’s reinsurers generally hold an A.M Best FSR of A- (Excellent) or above. The group maintains a relatively conservative investment allocation, with 75 percent of investments held as short-term deposits, 9 percent as equities and 16 percent as real estate. A significant proportion of future profits are expected to be retained in order to support business growth,” said the ratings firm.