LONDON, 12 November 2015
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Bahrain Kuwait Insurance Company B.S.C. (BKIC) (Bahrain). The outlook for both ratings is stable. The ratings reflect BKIC's strong risk-adjusted capitalisation, excellent track record of technical profit and leading domestic franchise. The ratings of BKIC benefit from the financial strength of its parent company, Gulf Insurance Group K.S.C.P. (GIG), and its strategic importance to the group.
BKIC enjoys an excellent domestic franchise in Bahrain, where it ranks as the leading insurer by gross written premium, and also holds a prominent position within Kuwait as a top five insurer. Although well-positioned in Bahrain and Kuwait, these two relatively small markets constrain BKIC's ability to generate growth. A.M. Best expects BKIC's prospective risk-adjusted capitalisation to remain strong and sufficient to absorb the company's strategic initiatives. BKIC's risk-adjusted capitalisation benefits from its strong reinsurance panel limiting counterparty credit risk, low business leverage and its conservative investment policy.
BKIC has an excellent track record of profitability, driven by its sound underwriting performance across all lines of business. Whilst BKIC's combined ratio increased in 2014, it remained very strong at 79% (2013: 76%). Furthermore, net income continues to be supported by stable investment returns due to BKIC's low risk investment policy, which is geared toward cash and short-term deposits. BKIC is an important and well-integrated member of GIG, which has recently embarked on a common branding strategy for all group members. GIG has steadily increased its shareholding in BKIC and currently owns a 56% majority stake.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure. This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best's Ratings & Criteria Center.
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