AM Best Affirms Credit Ratings of Emirates Insurance Company P.J.S.C.

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Emirates Insurance Company P.J.S.C. (EIC) (United Arab Emirates). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect EIC’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 (ERM).

EIC’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level at year-end 2019, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital requirements are largely driven by asset risk arising from the company’s investment portfolio, which is weighted toward equities in the UAE. In AM Best’s view, EIC has sufficient capital buffers to absorb volatility arising from this asset class, with capital adequacy remaining robust despite the COVID-19 pandemic driven investment market turbulence during the first half of 2020. The company’s balance sheet also benefits from strong liquidity and prudent reserving practices. A partially offsetting factor is EIC’s moderate dependence on reinsurance, evidenced by a retention ratio of 50.5% in 2019. However, credit risk is mitigated by the excellent quality of its reinsurance panel.

EIC has a track record of strong operating performance, with a good balance of earnings between underwriting and investment returns. The company’s reported five-year (2015-2019) average return on equity is approximately 10%, supported by strong and relatively stable underwriting results with an average combined ratio of around 90% for the same period.

AM Best notes that EIC’s reported performance since 2016 will be subject to restatement following identification, in the first half of 2020, of an error in the recognition of a subset of claims over this period. As a result, earnings have been overstated by a total of AED 67.1 million (USD 18.3 million) since 2016, equivalent to up to four points on the company’s loss ratio in any given year. Incorporating the impact of this restatement, the company’s performance remains within AM Best’s expectations for the strong operating performance assessment.

The company’s ERM assessment is considered as appropriate. However, AM Best expects EIC to review and strengthen its control environment in light of the accounting error identified.

EIC maintains a good competitive position in its domestic market, ranking fifth in terms of gross written premiums (GWP) in 2019. The company writes a diversified portfolio of non-life insurance and reinsurance business, although there is a weighting toward domestic motor business on a net basis. EIC’s profile is enhanced by geographic diversification from its specialist reinsurance arm, Emirates Insurance Company International (EIC International), which currently contributes approximately 20% of the total GWP.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Romeo Berti, ACA, CMA
Financial Analyst
+44 20 7397 0297
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Alex Rafferty, ACA
Associate Director, Analytics
+44 20 7397 0312
[email protected]

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
[email protected]

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