AM Best has affirmed the financial strength rating (FSR) of B++ (good) and the long-term issuer credit rating (ICR) of “bbb” for Solidarity Bahrain.The outlook of the FSR is stable, while the outlook of the long-term ICR is positive, the ratings agency said.
The ratings reflect Solidarity Bahrain’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating enhancement, reflecting Solidarity Bahrain’s strategic importance to its ultimate parent company, Solidarity Group Holding, a provider of Islamic insurance solutions in Bahrain and Jordan.
The positive outlook reflects the potential benefits of an enhanced business profile for the Solidarity group following the integration of Al Ahlia Insurance Company (AAIC) into its operations.
AM Best expects Solidarity Bahrain’s operating performance to remain adequate, benefitting from corrective actions taken by management to improve the profitability of AAIC’s legacy operations through strengthened underwriting practices and more stringent risk selection. Furthermore, de-risking of Solidarity Bahrain’s investment portfolio is expected to result in greater earnings stability over the medium term.
Solidarity Bahrain was formed following the merger between AAIC and Solidarity General Takaful on 3 December 2017, creating a leading insurer in the Bahraini insurance market by gross written contribution. However, Solidarity Bahrain’s business profile remains limited by its concentration in Bahrain’s insurance market, which is relatively small and highly competitive, AM Best said.
Details:
Read AM Best's financial strength rating guide (PDF)