LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Solidarity Bahrain B.S.C. (Solidarity Bahrain) (Bahrain). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Solidarity Bahrain’s 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 consider, in the form of lift, Solidarity Bahrain’s strategic importance to its parent company, Solidarity Group Holding BSC (c), a leading provider of Islamic insurance solutions in Bahrain and Jordan.
Solidarity Bahrain’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), its strong level of liquidity, and its good financial flexibility, with access to the capital markets. Offsetting factors include the company’s high dependence on reinsurance and elevated asset risk due to the concentration of its investments in Bahrain and the Gulf Cooperation Council region.
AM Best expects Solidarity Bahrain’s operating performance to remain adequate over the medium term, supported by positive and improving technical profitability, as well as moderate investment income. In 2019, the company reported a return on equity of 11.7%. Similar profitability is expected for 2020, as a result of continued underwriting discipline and a reduction in claims levels expected to result from the restrictions imposed by the government in response to the COVID-19 pandemic.
Solidarity Bahrain is a leading insurer in Bahrain, with gross written premium of BHD 30.9 million (USD 82.3 million) in 2019. However, the company’s business profile remains constrained by its concentration in Bahrain, which is a relatively small and very competitive insurance market.
This press release relates to Credit Ratings that have been published on AM Best’s 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 Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
