AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Qatar General Insurance & Reinsurance Company QPSC (QGIRC) (Qatar). The outlook of these Credit Ratings (ratings) is negative.

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

The negative outlooks reflect continued pressure on QGIRC’s ERM and operating performance assessments. Whilst QGIRC has taken remedial actions to strengthen internal controls, processes and governance, AM Best considers that the company’s investment risk profile exceeds its risk management capabilities. In addition, material unrealised losses arising from QGIRC’s concentrated real estate investment portfolio have resulted in it reporting substantial net losses in two of the past five years (2020-2024).

QGIRC’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation marginally above the threshold for the strongest assessment, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best projects the company’s prospective risk-adjusted capitalisation to remain at least at the very strong level, supported by the full retention of earnings over the medium term. QGIRC has sufficient liquidity to cover its net insurance contract liabilities, although almost two-thirds of its liquid assets are listed equities, which exposes the company to market risk. The company remains highly concentrated to real estate and private equity investments, albeit to a lesser extent than in prior years, with three assets accounting for over half of the investment portfolio.

QGIRC’s investment results have been very volatile and have more than offset the generally positive underwriting results. While investment performance showed improvement since the second half of 2024, which pushed the company to a small net profit of QAR 30.4 million for the full year, QGIRC reported cumulative unrealised investment losses of QAR 2.4 billion over the six-year period between 2018 and 2023. These losses were responsible for the QAR 1.6 billion and QAR 0.5 billion net losses in 2023 and 2022, respectively.

QGIRC implemented robust corrective actions following governance failures under the previous management team, which contributed to material asset write-downs in 2020. While management has a clear mandate to gradually derisk the investment profile, the company’s investment risk profile remains very high, creating the potential for further volatility within QGIRC’s operations.

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