LONDON, 14 April 2016

A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of National Life and General Insurance Company SAOC (NLGIC) (Oman). The outlook for each rating remains stable. The ratings of NLGIC reflect its strong and evolving business profile, track record of good operating performance and supportive risk-adjusted capitalisation. A partially offsetting rating factor remains the company's concentrated underwriting portfolio, which is focused toward medical health care business. NLGIC has a strong business profile as a medical underwriter in Oman and a growing presence in the United Arab Emirates (UAE).

Over the past five years, the company's business profile has shifted from that of a composite insurer, with an emphasis on life business, to an increasingly focused medical underwriter. This follows a period of concerted growth in the company's Oman and UAE medical operations, which currently account for more than 85% of gross written premiums. NLGIC has a track record of good operating performance, evidenced by profit generation in each of the past five years (2011-2015). During 2015, the company reported a robust pre-tax operating result of OMR 4.9 million (USD 12.8 million), compared with OMR 4.3 million (USD 11.2 million) in 2014.

Overall earnings continue to reflect strong underwriting performance from the company's core medical portfolio in Oman and profitable results from its medical accounts in the UAE. Investment operations continue to generate stable profits, however, only represent a small proportion of overall earnings. Given NLGIC's focus on medical health care business over the medium term, prospective earnings are likely to be driven by the performance of this business line. The company's risk-adjusted capitalisation weakened during 2015, but remains at a level supportive of the current ratings.

Despite capital and surplus increasing by approximately 15% to OMR 26.1 million (USD 68.1 million) during the year, capital requirements grew at a faster rate due to a significant increase in underwriting risk. Over the next three years, A.M. Best expects net premium growth of between 20% and 30% per annum to drive increased capital requirements. Prospective capital adequacy is expected to be supported by strong retained earnings. In addition, financial support from the company's ultimate parent, Oman International Development and Investment Company SAOG, is expected to be forthcoming if required to support further growth initiatives.

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