AM Best Upgrades Issuer Credit Rating of Gulf Insurance Group (Gulf) B.S.C. (c)

AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” (Excellent) from “a” (Excellent) and affirmed the Financial Strength Rating of A (Excellent) of Gulf Insurance Group (Gulf) B.S.C. (c) (GIG Gulf) (Bahrain). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect GIG Gulf’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The Long-Term ICR upgrade reflects AM Best’s recognition of implicit support provided to GIG Gulf by its parent, Gulf Insurance Group K.S.C.P. (GIG). GIG Gulf’s ratings benefit from the favorable financial flexibility and capital resources of its parent company. In addition, GIG Gulf benefits from shared resources including ERM, actuarial, investment management, and other less quantifiable benefits, such as best practices and capital management.

GIG Gulf’s balance sheet strength assessment reflects its risk-adjusted capitalisation, which was comfortably at the strongest level at year-end 2023, as measured by Best’s Capital Adequacy Ratio (BCAR). A conservative asset allocation, low reliance on reinsurance and prudent reserving practices further support the company’s balance sheet.

GIG Gulf’s operating performance assessment considers the company’s history of strong overall profitability, underpinned by robust underwriting performance. In 2023, GIG Gulf reported a post-tax profit of BHD 17.7 million (USD 47.2 million), translating to a return on equity of 11.6%. Historically, the company’s earnings have been supported through both investment and underwriting returns, which was demonstrated again in 2023, with investment income of BHD 12.6 million supporting underwriting profits. GIG Gulf’s underwriting discipline was demonstrated in 2023 and the first six months of 2024, when the company focused on higher margin products and actively non-renewed poorly performing business.

GIG Gulf’s business profile assessment reflects its established position, commanding a top five position within each of its core markets: the United Arab Emirates, Bahrain and Oman. Additionally, the company has a 50% ownership stake in Gulf Insurance Group (A Saudi Joint Stock Company) in Saudi Arabia. GIG Gulf’s assessment also reflects its moderate level of diversification by geography and line of business, which has remained following its successful rebranding and integration into GIG. AM Best considers the company’s risk management capabilities to be relatively sophisticated.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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