News, ratings
Al Ittihad Gets B+
| January 26, 2010 by Hussain Hadi
Al Ittihad’s improving capital position is rewarded with a B+ rating.
AM Best Co has assigned a financial strength rating of B+ (Good) and an issuer credit rating of “bbb-” to Al Ittihad Al Watani (L’Union Nationale) Societe Generale d’Assurances du Proche Orient sal (Al Ittihad) (Lebanon). The ratings of Al Ittihad reflect its improving capital position, robust underwriting performance and good business profile. Offsetting factors include its weak investment strategy and underdeveloped risk management framework.
Al Ittihad is a Lebanese-based insurer with branches in the UAE and Kuwait, concentrating mainly on motor and medical business. AM Best expects Al Ittihad to continue to grow within its key markets, between 10 to 15 per cent in each of the next two years, with gross premiums written expected to be in excess of LBP110bn (US$75m).
Al Ittihad’s pretax profits were US$5m in 2008 and technical profits of US$5.85m. A.M. Best expects Al Ittihad’s combined ratio to remain below 90 per cent over the next two years. Conversely, Al Ittihad’s investment performance has been weak (with returns consistently below four per cent), given its historic concentration in private equity and real estate assets.
