AM Best Confirms SNIC Insurance BSC Credit Rating (c)

London–()–AM Best affirmed SNIC Insurance BSC (c) (SNIC) (Bahrain) with a financial rating of B+ (good) and a long-term issuer credit rating of ‘bbb-‘ (good). The outlook for these credit ratings is stable.

The rating reflects the strength of SNIC’s balance sheet, which AM Best rates as very strong, adequate operating performance, limited business profile and marginal corporate risk management.

The strength of SNIC’s balance sheet is underpinned by enhanced risk-adjusted capital to reach its strongest level by the end of 2021, as measured by the Best’s Capital Adequacy Ratio (BCAR). The company’s risk-adjusted capital has been volatile in recent years due to changes in the value of its significant investment interests in its associated listed company, Wataniya General Insurance Company Limited (Wataniya). AM Best plans to reduce SNIC’s holding of Wataniya following his first partial sale, which was completed in the third quarter of 2022, so SNIC’s BCAR We expect the score to be further enhanced in the future. Such investment risk reduction is expected to contribute to lower risk volatility. Future adjusted capitalization.

SNIC’s favorable performance evaluation reflects positive revenue generation with a five-year (2017-2021) weighted average return on equity of 3.8%. In 2021, SNIC delivered a modest underwriting profit with a combined ratio of 99.3% (calculated by AM Best), unchanged from 2020. follow-on to underwriting losses in previous years. In line with its strategy, the company plans to improve underwriting revenues by providing employee benefits solutions, with a particular focus on partnerships with auto dealers. However, AM Best notes that execution risk remains a challenge for SNIC to achieve consistent underwriting profitability, and its loss ratio is expected to increase significantly in the first half of 2022. and follows the growth of motorbooks. In response, SNIC initiated performance remediation actions.

SNIC reported gross premiums written of BHD 12.7 million (USD 34.1 million) in 2021, representing growth of around 30% year-on-year. A limited business profile rating reflects SNIC’s focus. The company operates only in the highly competitive and relatively small Bahrain market, with a focus on motor insurance and medical insurance.

SNIC is an insurance subsidiary of EA Juffali & Brothers, a family-owned conglomerate operating in Saudi Arabia. SNIC will not receive any rating upgrades or downgrades from this partnership.

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