A.M. Best Affirms Ratings of First Insurance Company

A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of First Insurance Company (FIC) (Jordan). The outlook for each rating remains stable.

The ratings of FIC reflect its growing business profile, strong risk-adjusted capitalisation and sound financial performance. Offsetting rating factors include the economic and financial risks associated with operating in Jordan.

FIC is Jordan’s leading takaful operator and fourth-largest insurance company. Following its 2015 acquisition and subsequent merger with Yarmouk Insurance Company (Yarmouk), FIC gained access to the underdeveloped Jordan life market, presenting further growth opportunities.

FIC’s risk-adjusted capitalisation has remained strong following the acquisition of Yarmouk, supported by a low level of underwriting leverage, a reinsurance programme of good credit quality and a conservative investment profile. Furthermore, risk-adjusted capitalisation is expected to adequately support the company’s business initiatives over the medium term, which include further premium growth.

FIC’s operational performance remained sound in 2015, benefiting from a steady investment yield and stable technical performance. The company achieved a return on equity of 5%, and reported a combined ratio of 91% in both 2015 and 2014. FIC operates a sustainable takaful model and has generated a small surplus of approximately JOD 91,000 in its policyholders’ fund.

Despite FIC’s track record of solid operating performance, its operations and assets remain largely exposed to Jordan’s relatively high levels of economic, political and financial system risk.

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

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