Muscat headquartered National Life and General Insurance Company (NLGIC) is well-positioned to benefit from the expected introduction of mandatory medical insurance in Oman, with the anticipated increase in business likely to provide the company with additional scale, according to AM Best.
The company is the leading medical underwriter in Oman and has a growing presence in the UAE.
Implementation of the mandatory health insurance programme, though, is expected to be delayed until the end of the year.
AM Best says that NLGIC’s strong operating performance, evidenced by a five-year (2015-2019) reported weighted average return on equity of 17%, has been driven by good underwriting results from its non-life portfolio (five-year weighted average combined ratio of 92%).
Medical and motor business are the principal contributors to earnings, with performance supported by profits from the company’s group credit life business and stable albeit relatively modest investment income.
NLGIC has a concentrated underwriting portfolio, with medical business accounting for 82% of gross written premiums.
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of NLGIC. The outlook of these credit ratings remains stable.
The ratings reflect NLGIC’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
NLGIC’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and benefits from a conservative investment strategy and a reinsurance panel of good credit quality. The balance sheet assessment also factors in the company’s good level of liquidity and low financial leverage. An offsetting factor includes the concentration of the company’s assets in GCC markets. The balance sheet strength assessment incorporates AM Best’s assessment of economic, political and financial system risk in Oman and the UAE.