LONDON:—AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Misr Insurance Company (MIC) (Egypt). The outlook of these Credit Ratings (ratings) is stable. MIC and Misr Life Insurance Company (Egypt) are directly owned by Misr Insurance Holding Company (Egypt) and form part of the consolidated Misr Group.

The ratings reflect MIC’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in the financial strength of the Misr Group, due to MIC’s strategic importance to the group.

MIC’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Whilst the company maintains a conservative investment portfolio, with the majority of financial assets held in cash and fixed-income securities, regulatory restrictions in Egypt limit the company’s investment options. Offsetting rating factors include a moderate reliance on reinsurance and historical reserve volatility.

The company’s operating performance is assessed as adequate, reflective of a five-year (2015-2019) average return-on-equity and combined ratio of 11.8% and 93.5%, respectively. The majority of MIC’s operating profits can be attributed to strong investment income, indicative of the company’s large asset base and Egypt’s high interest rate environment. For the financial year (FY) ending 30 June 2019, the company delivered an improved combined ratio of 98% compared with 103% in the prior year. AM Best expects prospective underwriting performance to improve as MIC implements strategic initiatives, including changes to the remuneration structure and an increased focus on underwriting discipline and profitable growth.

MIC has a market-leading position in its domestic insurance market, with approximately 49% market share based on FY 2018 gross written premiums. The company’s gross written premium increased modestly by 5% to EGP 9.0 billion (USD 539.5 million) for FY 2019, reinforcing its dominant position in Egypt’s non-life insurance sector. Whilst business is concentrated in Egypt, the company benefits from some geographical diversification stemming from its regional inwards facultative business, which accounts for approximately 18% of premium revenue.


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.

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