A.M. Best has assigned a Financial Strength Rating of B++ and a Long-Term Issuer Credit Rating of “bbb” to Solidarity Bahrain.
The ratings reflect Solidarity Bahrain’s (previously known as Al Ahlia Insurance Company) balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The outlook assigned to the FSR is stable, while the outlook assigned to the Long-Term ICR is positive.
The ratings also reflect the company’s strategic importance to its ultimate parent company, Solidarity Group Holding, a leading provider of Islamic insurance solutions in Bahrain and Jordan.
The positive Long-Term ICR outlook reflects the potential benefits of an enhanced business profile of the Solidarity group that would result from the successful integration of Solidarity Bahrain into its operations.
Solidarity Bahrain, a company listed on the Bahrain Bourse, was acquired by Solidarity Group Holding in December 2016 as part of the group’s expansion strategy.
In line with their plan, SGH successfully completed the merger of Solidarity General Takaful into Al Ahlia Insurance Company this month, and rebranded Al Ahlia as Solidarity Bahrain.
Solidarity Bahrain’s very strong balance sheet assessment is underpinned by risk-adjusted capitalization at the strongest level, supported by low underwriting leverage and a reinsurance panel of good credit quality, good liquidity and no debt leverage.
Solidarity Bahrain’s risk-adjusted capitalization is measured on a consolidated basis (integrating shareholders’ and policyholders’ funds) given the strength of regulation in Bahrain and the protection it provides to policyholders.
Solidarity Bahrain’s operating performance is expected to remain adequate, as the new management team has taken actions to improve the profitability of Solidarity Bahrain’s legacy operations, which should translate into good technical performance for the merged entity, in line with SGT’s track record of profitability.
Following the merger, the company is expected to have a leading position in its domestic market, writing primarily motor and medical insurance via an established network of branches in the kingdom.
However, the company remains concentrated in Bahrain, which offers limited growth opportunities and constrains the business profile assessment.
For more information, visit http://www.solidaritygroup.com/.