A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of B.E.S.T. Reinsurance (BEST Re) (Tunisia). The outlook on both ratings remains stable.
The ratings of BEST Re reflect its significant importance to its ultimate parent, SALAMA Islamic Arab Insurance Company (P.S.C.) (SALAMA). The ratings also reflect BEST Re’s improving business diversification, solid financial performance with consistently profitable technical accounts and declining, although strong, risk-adjusted capitalisation.
A.M. Best believes that BEST Re’s business profile is further improving with continuous gross premium expansion—through new business and increasing shares in existing treaties—in the emerging markets such as the Far East, Central Asia, North Africa and Middle East. BEST Re also is expected to considerably develop its life business line in the coming years after it began underwriting in 2007. A.M. Best expects overall premiums growth to be in the range of 25%-30% per annum in 2008 and 2009.
A.M. Best believes that BEST Re has solid overall earnings, with pre-tax profits of USD 10.6 million in 2007, which are expected to increase annually in the range of 10%-15% in 2008 and 2009. In A.M. Best’s view, BEST Re’s overall earnings are likely to remain dependent mainly on very good technical results, while investment returns, although improving, are likely to remain low for the region.
In A.M. Best’s opinion, BEST Re’s risk-adjusted capitalization, although still strong, declined in 2007 and is likely to continue decreasing in 2008, mainly due to the high business growth in both years. A capital injection of USD 50 million in 2009 is likely to more than mitigate the continuous business growth in that year, with the risk-adjusted capitalisation experiencing a slight improvement.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
Contacts:
Analysts
Anandi Nangy Kotecha, +(44) 20 7626 6264
anandi.nangy-kotecha@ambest.com
or
Anna
Orlovskaya, +(44) 20 7626 6264
anna.orlovskaya@ambest.com
or
Public
Relations
Jim Peavy, +(1) 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle
Morrow, +(1) 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
