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   LONDON--(Business Wire)--A.M. Best Europe - Rating Services Limited has affirmed the financial strengthrating of B++ (Good) and the issuer credit rating of "bbb+" of Al FajerRetakaful Insurance Company K.S.C. (Closed) (Al Fajer Re) (Kuwait). The outlookfor both ratings remains negative. The ratings reflect the good level of risk-adjusted capitalisation within AlFajer Re`s combined shareholders` and retakaful funds. Offsetting factorsinclude a marginal level of risk-adjusted capitalisation within the company`sstand-alone retakaful fund and historically volatile financial results. The negative outlook reflects A.M. Best`s concerns over Al Fajer Re`shistorically weak financial results and its deteriorating level of risk-adjustedcapitalisation, particularly within the stand-alone retakaful fund. Although Al Fajer Re`s financial results have been somewhat volatile in thepast, with underwriting results being affected by large losses and investmentresults impacted by significant provisioning, the company reported improvedfigures for the financial year ending March 31, 2012, with modest profits fromboth underwriting and investment operations. In fact, the 2012 financial yearrepresented Al Fajer Re`s first year of underwriting profits since inception in2008, with the company reporting a loss ratio of 59% and a combined ratio of96%. In the same year, the company`s retakaful fund repaid KD 0.8 million (USD 3million) of its outstanding KD 6.6 million (USD 23.4 million) Qard Hassan(interest free loan from shareholders), and its shareholders` fund reported anet profit of KD 0.2 million (USD 0.8 million). A.M. Best notes that Al Fajer Reis making a concerted effort to improve its level of enterprise wide riskmanagement following the difficulties it has encountered over previous years,and A.M. Best expects that improvements will continue in the coming years. The level of risk-adjusted capitalisation within Al Fajer Re`s stand-aloneretakaful fund decreased to a marginal level during the 2011 financial year,mainly as a result of provisioning for the company`s investment in TheInvestment Dar Company and underwriting losses. These same factors also reducedthe level of risk-adjusted capitalisation within Al Fajer Re`s combinedretakaful and shareholders` fund; however, in A.M. Best`s opinion, thiscurrently remains at a good level. Al Fajer Re`s level of risk-adjustedcapitalisation was stabilized in 2012 following management`s actions to curtailnew business growth and premium volumes, and similar action is expected in 2012.A.M. Best`s ratings take into consideration Al Fajer Re`s level of risk-adjustedcapitalisation within the combined funds as capital available in the company`sshareholders` fund can be accessible in order to support any potential futurelosses in the retakaful fund via a Qard Hassan. A downgrading of Al Fajer Re`s ratings is likely if there is any furtherdeterioration in the level of risk-adjusted capitalisation in its stand-aloneretakaful fund or if the company experiences any further significantunderwriting or investment losses. A stabilisation of the ratings is likely overthe next 12 to 24 months if Al Fajer Re is able to perform in accordance withits business plans and generate profitable new business while maintaining anadequate level of risk-adjusted capitalisation. The methodology used in determining these ratings is Best`s Credit RatingMethodology, which provides an extensive explanation of A.M. Best`s ratingprocess and contains the different rating criteria employed in the ratingprocess. Key criteria utilised include: "Risk Management and the Rating Processfor Insurance Companies"; "Takaful (Shari`a Compliant) Insurance Companies";"Assessing Country Risk"; and "Understanding Universal BCAR". Best`s CreditRating Methodology can be found at 
  www.ambest.com/ratings/methodology.
  In accordance with Regulation (EC) No. 1060/2009, the following is a link torequired disclosures: A.M. Best Europe - Rating Services Limited SupplementaryDisclosure.A.M. Best Europe - Rating Services Limited is a subsidiary of A.M. BestCompany.Founded in 1899, A.M. Best Company is the world's oldest and mostauthoritative insurance rating and information source. For more information,visit 
  www.ambest.com.
  Copyright  2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.  A.M. Best Europe - Rating Services LimitedTimothy PrinceSenior Financial Analyst+(44) 20 7397 0320timothy.prince@ambest.comorMahesh MistryAssociate Director+(44) 20 7397 0325mahesh.mistry@ambest.comorRachelle MorrowSenior Manager, Public Relations+(1) 908 439 2200, ext. 5378rachelle.morrow@ambest.comorJim PeavyAssistant Vice President, Public Relations+(1) 908 439 2200, ext. 5644james.peavy@ambest.comCopyright Business Wire 2012