AM Best Downgrades and Withdraws Credit Ratings of Insurance House P.S.C.; Maintains Under Review With Negative Implications Status

AM Best has downgraded the Financial Strength Rating to C (Weak) from C++ (Marginal) and the Long-Term Issuer Credit Rating to “ccc” (Weak) from “b+” (Marginal) of Insurance House P.S.C. (IH) (United Arab Emirates). Concurrently, AM Best has withdrawn these Credit Ratings (ratings) as the company has requested to no longer participate in AM Best’s interactive rating process. At the time of the withdrawal, these ratings were under review with negative implications.

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

The rating downgrades reflect the revision of IH’s balance sheet strength, following further deterioration in the company’s risk-adjusted capitalisation and liquidity position during the second quarter of 2023, principally driven by material underwriting losses.

In May 2023, IH reported material misstatements, which resulted in a write-down of AED 69.3 million within the restated financial statements as of 31 December 2022. Following the restatement, the company is in breach of regulatory minimum capital requirements as per the Central Bank of UAE. During the first half of 2023, the company has reported AED 26.9 million losses, principally driven by underwriting losses stemming from its motor portfolio, resulting in further deterioration in the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), falling to the very weak level, from the adequate level at the end of the first quarter of 2023.

Following the weaknesses in regulatory solvency and operating performance, IH’s new management team has initiated remedial actions. The company has published a recovery plan, notably to raise capital and recover its regulatory solvency position in the near term and imposed stringent guidelines to improve the performance of the motor and medical portfolios. However, given the challenges the company faces, AM Best recognises execution risk associated with the company’s recovery plan.

The material accounting misstatements and control failings also highlight concerns around IH’s corporate governance and risk management capabilities. New management is looking to rectify these deficiencies.

The ratings have been maintained under review with negative implications while AM Best assesses the timing and impact of the aforementioned remedial actions on IH’s credit rating fundamentals.

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

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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