LONDON–(BUSINESS WIRE)–A.M. Best has assigned a Financial Strength Rating (FSR) of B++
(Good) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” to Al
Ahlia Insurance Company B.S.C. (AAIC) (Bahrain). The outlook
assigned to the FSR is stable, while the outlook assigned to the
Long-Term ICR is positive.
The ratings reflect Al Ahlia’s balance sheet strength, which A.M. Best
categorises as very strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise risk
management. The ratings also reflect the company’s 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 that
would result from the successful integration of AAIC into its operations.
AAIC, a company listed on the Bahrain Bourse, was acquired by SGH in
December 2016 as part of the group’s expansion strategy. In line with
their plan, SGH successfully completed the merger of Solidarity
General Takaful BSC (c) (SGT) into AAIC on 3 December 2017, with the
entity expected to be rebranded Solidarity Bahrain in the coming weeks.
AAIC’s very strong balance sheet assessment is underpinned by
risk-adjusted capitalisation at the strongest level, supported by low
underwriting leverage and a reinsurance panel of good credit quality,
good liquidity and no debt leverage. AAIC’s risk-adjusted capitalisation
is measured on a consolidated basis (integrating shareholders’ and
policyholders’ funds) given the strength of regulation in Bahrain and
the protection it provides to policyholders.
AAIC’s operating performance is expected to remain adequate, as the new
management team has taken actions to improve the profitability of AAIC’s
legacy operations, which should translate into good technical
performance for the merged entity, in line with SGT’s track record of
profitability. Following the merger, the company is expected to have a
leading position in its domestic market, writing primarily motor and
medical insurance via an established network of branches in the kingdom.
However, the company remains concentrated in Bahrain, which offers
limited growth opportunities and constrains the business profile
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