AM Best confirms credit ratings of Qatar Insurance Company QSPC and its main subsidiary

LONDON– (BUSINESS WIRE) –
AM Best confirmed the financial strength rating of A (excellent) and long-term issuer credit ratings of “a” (excellent) of Qatar Insurance Company QSPC (QIC) (Qatar) and its subsidiary, Qatar Reinsurance Company Limited (Qatar Re) (Bermuda). The outlook for these credit ratings (ratings) is negative.

The ratings reflect the strength of QIC’s balance sheet, which AM Best considers to be very strong, as well as its strong operational performance, neutral business profile and appropriate enterprise risk management (ERM).

The negative outlook reflects the pressure on the current assessment of AM Best’s operating performance as strong due to the poor underwriting performance in the group’s international operations (QIC Global) outside of Middle East Region. Since 2017, QICs Global’s results have been negatively impacted by disaster-related losses, changes in the UK Ogden discount rate and COVID-19-related losses in 2020. As a result, the group has produces a combined five-year average (2016-2020). 104% ratio.

The pressure on QIC’s technical results highlights weaknesses in governance and underwriting control in the group’s decision-making process. Although QIC’s ERM framework has improved in recent years, AM Best believes that further development is needed for QIC to manage risk holistically at the group level. Recent regulatory solvency breaches in global subsidiaries, which have since been resolved, have highlighted this requirement.

The strength of the group’s balance sheet is based on its risk-adjusted capitalization at the highest level, as measured by Best’s capital adequacy ratio (BCAR). Other positive factors include good financial flexibility, a diversified, low risk investment portfolio by asset class and moderate reliance on reinsurance. Compensating factors are the uncertainty surrounding the quality of provisioning and the concentration of assets towards Qatar and Gulf Cooperation Council countries. QIC has recovered its QAR 953 million ($ 262 million) loan balance due of MarkerStudy Group Limited during 2021, by eliminating the credit risk associated with this asset.

In 2020, QIC reported gross written premiums (PRP) of QAR 12.2 billion ($ 3.4 billion), an increase of 1% compared to 2019. About 80% of the PRP comes from QIC Global, which benefits from a geographically diverse multiplatform approach, including a Lloyd’s (Antares) platform, a Bermuda reinsurer (Qatar Re) and insurers for primary insurance in Europe. QIC occupies a leading position in Qatar and a strong competitive position in the United Arab Emirates. While the makeup of QIC’s business has been volatile in recent years, the group has focused more on low-volatility lines, with more than half of the GWP coming from auto insurance in the UK, continental Europe and the Middle East.

This press release relates to credit ratings published on the AM Best website. For all rating information relating to the posting and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this post, please see AM Best’s Recent Rating Activity webpage. . For more information on the use and limitations of credit rating reviews, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best Credit Ratings, Best Preliminary Credit Ratings, and AM Best press releases, please see the Guide to Appropriate Use of Best Ratings and Reviews.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based at United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico. For more information, visit www.ambest.com.

Copyright © 2021 by AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.

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William Keen Tomlinson
Senior Financial Analyst

+44 20 7397 4395

[email protected]

Michael dunckley
Associate Director, Analytics

+44 20 7397 0276

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Christophe sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

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Jim peavy
Director, Communications

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best