AM Best Affirms Credit Ratings of Compagnie Algérienne des Assurances

AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” (Fair) of Compagnie Algérienne des Assurances (CAAT) (Algeria). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect CAAT’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management.

CAAT’s balance sheet strength assessment reflects the company’s strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is supported by relatively low net underwriting leverage and good internal capital generation. AM Best considers CAAT to have a conservative investment portfolio by asset class, comprised of mainly bonds and cash. However, asset quality is limited with nearly all assets invested domestically, in line with local regulatory requirements, which exposes CAAT to the elevated levels of economic, political and financial system risk prevailing in Algeria. Other offsetting factors in the balance sheet strength assessment include the high exposure to premium debtors and CAAT’s increasing reliance on reinsurance, with 61.4% of gross written premium ceded in 2022.

CAAT has a track record of strong operating performance, with a five-year (2018-2022) weighted average return on premium of 24.8% and return on equity of 9.7%. Operating results have been underpinned by strong and stable technical results, demonstrated by a five-year (2018-2022) weighted average combined ratio of 91.0%. CAAT’s conservative approach to underwriting and comprehensive reinsurance programme have resulted in a generally strong technical performance. Results are supplemented by good investment returns, with a five-year average investment yield of 3.7%. Net income in 2022 weakened to DZD 1.9 billion (USD 13.7 million) from DZD 2.9 billion in 2021 due to elevated claims and provision for doubtful debts; however, AM Best expects prospective underwriting profitability to remain robust and supportive of a strong operating performance assessment over time.

CAAT’s business profile assessment reflects its good competitive position in Algeria’s insurance market and its well-developed distribution network. In 2022, CAAT underwrote gross written premium (GWP) of DZD 26.7 billion (USD 194.7 million), with the company remaining the second-largest domestic insurer based on GWP. The company’s established market position is based on its historical role as the provider of transport insurance in its domestic market. CAAT has diversified its book of business by class of business over time, although it maintains a focus on commercial and industrial property business. A limiting factor in the assessment is CAAT’s geographically concentrated business profile, with all insurance business currently sourced domestically.

AM Best considers CAAT’s risk management framework to be at an early stage of development, although this has been an area of strategic focus and development for the company in recent years. The company faces considerable challenges represented by the concentration of its business and assets in Algeria, where the company is domiciled, and the resulting significant exposure to elevated economic, political and financial system risks.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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

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