AM Best has affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of bbb of Solidarity Bahrain B.S.C. (Solidarity Bahrain) (Bahrain). The outlook of the FSR is stable, while the outlook of the Long-Term ICR is positive.
The Credit Ratings (ratings) reflect Solidarity Bahrains balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating enhancement, reflecting Solidarity Bahrains strategic importance to its ultimate parent company, Solidarity Group Holding BSC (c) (SGH), a leading provider of Islamic insurance solutions in Bahrain and Jordan.
The positive Long-Term ICR outlook reflects the potential benefits of an enhanced business profile of the Solidarity group following the integration of Al Ahlia Insurance Company B.S.C. (AAIC) (Bahrain) into its operations.
Solidarity Bahrains balance sheet strength is underpinned by its risk-adjusted capitalisation being at the strongest level, as measured by Bests Capital Adequacy Ratio (BCAR), good liquidity and financial flexibility, with access to the debt and the equity markets. The assessment also factors in the companys high reinsurance
dependence and the elevated asset risk stemming from its investment portfolio, which is concentrated in Bahrain and the Gulf Corporation Council.
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AM Best expects Solidarity Bahrains operating performance to remain adequate, benefitting from corrective actions taken by management to improve the profitability of AAICs legacy operations through strengthened underwriting practices and more stringent risk selection. Furthermore, de-risking of Solidarity Bahrains investment portfolio is expected to result in greater earnings stability over the medium term.
Solidarity Bahrain was formed following the merger between AAIC and Solidarity General Takaful BSC (c) on 3 December 2017, creating a leading insurer in the Bahraini insurance market by gross written contribution. However, Solidarity Bahrains business profile remains limited by its concentration in Bahrains insurance market, which is relatively small and highly competitive.
This press release relates to Credit Ratings that have been published on AM Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.
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Aneela Mather-Khan, CA
20 7397 0319
Ghislain Le Cam, CFA, FRM
20 7397 0268
Manager, Public Relations
908 439 2200, ext. 5159
Director, Public Relations
439 2200, ext. 5644