LONDON, 21 May 2015

A.M. Best has revised the outlooks to positive from stable and affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb+" of Dubai Insurance Company (PSC) (DIC) (United Arab Emirates).

The revised outlook reflects DIC's continued strong operating results, developments in enterprise risk management capabilities and a good franchise within the UAE. The ratings also reflect its very strong risk-adjusted capitalisation and sound reinsurance protection. An offsetting factor is DIC's concentrated investment profile.

DIC has achieved an excellent five-year weighted average combined ratio of 79% while operating in the highly competitive UAE market. Return on equity over the same period has averaged 8.1% with underwriting performance driving profitability.

DIC is a medium size company operating in the UAE. The company reported premium revenue of AED 325 million (USD 88 million) for 2014, with 98% derived from the domestic market. The company's franchise benefits from access to business through shareholders and associated companies.

Risk-adjusted capitalisation remains very strong in 2015, with DIC's capital position boosted by an AED 69 million (USD 19 million) unrealised fair value gain on equity investments. The company's level of risk-adjusted capitalisation is supported by low underwriting leverage and sound reinsurance protection.

The company has a concentrated investment profile, with material exposure to UAE financial sector equities, which creates volatility in risk-adjusted capitalisation. However, DIC maintains sufficient liquidity to support its insurance operation and its balance sheet strength is sufficiently strong to absorb fluctuation in the value of its equity holdings.

Positive rating pressures can arise through further embedding and integration of enterprise risk management and strengthening in the company's market franchise. A prolonged deterioration in its operating performance could add negative pressure to the ratings.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilised:

· Catastrophe Analysis in A.M. Best Ratings

· Evaluating Country Risk

· Risk Management and the Rating Process for Insurance Companies

· Understanding Universal BCAR

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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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