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   LONDON--(Business Wire)--A.M. Best Europe - Rating Services Limited has assigned a financial strengthrating of B++ (Good) and an issuer credit rating of "bbb" to TakafulInternational Company BSC (TIC) (Bahrain).The outlook assigned to both ratingsis stable. The ratings of TIC reflect its sound domestic profile, satisfactoryrisk-adjusted capitalisation and sound track record of technical profitability.However, the ratings are tempered by the weaker overall earnings of the company,its higher risk investment portfolio, unsophisticated enterprise risk management(ERM) and the country risk associated with Bahrain. TIC wrote gross contributions of BHD 17.1 million in 2011, or 10% of the markettotal, ranking it as the third-largest insurer in Bahrain. Despite operating ina small Bahraini market, TIC has continued to deliver growth, with contributionsexpanding around 5% in 2011. Whilst competition is likely to remain tough, A.M.Best expects TIC to be able to defend its local position, leveraging off of itsposition as a provider of Islamic compliant insurance. A.M. Best has assessed the capitalisation of TIC on a consolidated basis(shareholders and policyholders` funds) in line with the Takaful insurancecompanies` methodology. TIC`s risk-adjusted capitalisation is consideredsatisfactory and supportive of its secure ratings. However, the company`scapital position has weakened slightly due to contribution growth, which hasoutpaced its internal capital generating ability. Whilst TIC`s track record oftechnical profitability is sound, with a positive balance recorded on both thelife and non-life technical accounts in each of the last five years, its overallearnings are considered to be fairly weak as a result of the low contributionsfrom its investment returns. In the short-to-medium term, these factors arelikely to remain unchanged; and thus, a weakening trend in risk-adjustedcapitalisation is likely to persist. However, management have indicated thatthey expect a capital injection in the short to medium term to support growthplans. Given that TIC is an Islamic compliant insurance company, it is subject tovarious restrictions with regard to investments. However, whilst A.M. Bestacknowledges this, the company is significantly exposed to unlisted, non-liquidinvestments such as private equity, which are difficult to value and more proneto value shocks. TIC`s ERM remains unsophisticated, although its relatively low risk profilehelps mitigate risks somewhat. Going forward, A.M. Best expects TIC to developits risk framework further and reduce reliance on reinsurers for expertise. The ratings incorporate the perceived country risk associated with Bahrain.Bahrain is currently ranked as a Country Risk Tier 3 country by A.M. Best,reflecting its high political risk and moderate economic and financial systemrisk. Positive rating movements are considered unlikely at present. Negative ratingmovements may occur should risk-adjusted capitalisation deteriorate faster thanexpected or should the planned capital injection not materialise in line withA.M. Best`s expectations. The methodology used in determining these ratings is Best`s Credit RatingMethodology, which provides a comprehensive explanation of A.M. Best`s ratingprocess and contains the different rating criteria employed in the ratingprocess. Key criteria utilised include: "Understanding Universal BCAR"; "Takaful(Shari`a Compliant) Insurance Companies"; "Catastrophe Analysis in A.M. BestRatings"; "BCAR for Life/Health Insurers"; "Rating Members of Insurance Groups";and "Evaluating Country Risk". Best`s Credit Rating 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.A.M. Best Company is the world's oldest and most authoritative insurancerating and information source. For more information, visit 
  www.ambest.com.
  Copyright  2013 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.  A.M. Best Europe - Rating Services LimitedDean PortelliSenior Financial Analyst+(44) 20 7397 0267dean.portelli@ambest.comorMahesh MistryDirector+(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 2013