Mena News - Oman: AM Best Affirms Ratings of NLIC
Source: Middle East Insurance Review | Mar 2007
AM Best Company has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of National Life Insurance Company (NLIC) of Oman. The outlook for both ratings is stable.
The agency says that the ratings reflect NLIC’s established share of its domestic market, strong risk-adjusted capitalisation and solid operating performance. An offsetting factor is an anticipated change in the insurer’s business profile to include more medical health risk and the development of non-life products, which is expected to result in a move away from traditional life insurance to become a composite insurer in lines where it has limited experience.
AM Best expects NLIC to maintain its very good business position in Oman as the leading life insurer with approximately a 65% market share of gross premiums written. NLIC provides group life creditor business, life assurance, investment and medical health products. This limits NLIC’s ability for expansion in its local life market, says AM Best.
NLIC’s risk-adjusted capitalisation has strengthened in the short term, as the absolute amount of capital increased by OMR1.5 million (US$3.9 million) to OMR5.5 million toward the end of 2006.
Furthermore, the company continues to experience solid operating performance with pre-tax profits of OMR3.3 million. However, AM Best believes that if the insurer’s projections for expansion into the non-life and regional markets are to be realised, then the risk-adjusted capitalisation – to some extent – may come under pressure.