LONDON, August 04, 2022–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Emirates Insurance Company PJSC (EIC) (United Arab Emirates). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect EIC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

EIC’s balance sheet strength is underpinned by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by low retained underwriting risk. The company’s balance sheet strength assessment also benefits from its good liquidity position and prudent reserving practices. Partially offsetting balance sheet strength factors include a degree of concentration within the company’s investment portfolio to equity holdings in the UAE, which EIC is addressing by diversifying its equity investments, and its moderately high reliance on reinsurance. In AM Best’s view, the credit risk associated with the latter is mitigated partially by the use of reinsurers of sound financial strength.

EIC has a track record of strong operating performance, reporting a five-year (2017-2021) weighted average return on equity of 9.5%. The company has demonstrated strong underwriting performance over time, as evidenced by a five-year (2017-2021) weighted average combined ratio of 90.1%. However, 2021 was a more challenging year for EIC, with the combined ratio reaching 96.3% (2020: 89.0%), which is above the company’s longer term average.

EIC maintains a well-established brand and position in the UAE insurance market. In 2021, the company generated gross written premium (GWP) of AED 1.1 billion (USD 304.5 million) and ranked as the sixth-largest insurer in its domestic market, based on GWP. EIC writes a diversified portfolio of non-life insurance and reinsurance