Takaful News - A.M. Best affirms ratings of Emirates Retakaful (B++), positive outlook
Source: Middle East Insurance Review | Jul 2016
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of Emirates Retakaful Limited (ERL) in the UAE. The outlook for each rating remains positive.
The ratings reflect ERL’s strong risk-adjusted capitalisation and stable, yet modest technical performance. An offsetting rating factor is ERL’s limited business profile, which has been affected by intense competition and the prevailing softening of the global reinsurance market.
ERL maintains a strong level of risk-adjusted capitalisation, benefiting from low business leverage and a conservative investment portfolio. The company is expected to maintain a sufficient capital buffer from strong earnings retention to support its strategic initiatives.
Furthermore, management factors risk-based capital requirements into its strategic forecasting and intends to retain capital in its policyholders’ fund in the medium term to support underwriting risks. A.M. Best notes that ERL is one of the few takaful companies to have a policyholders’ fund in a surplus position.